Hitachi, the Japanese energy and engineering company, has agreed to buy Britain’s nuclear project Horizon for an estimated £700m in a deal which could create up to 12,000 jobs in the country.
The venture was put up for sale by German companies E.ON and RWE, which decided to sell in March after Germany said it will close all of its reactors after last year’s nuclear disaster in Japan, prompting the utilities to pull back from the atomic industry worldwide.
The sale was a blow to the Government’s hopes for a new generation of nuclear power plants to meet the country's energy needs.
Hitachi, in the meantime, sold its profitable hard-disk drive unit to Western Digital in March and earlier sold a stake in Elpida Memory as it expanded into infrastructure and power businesses.
The Japanese group, which earns just under 10pc of its overall sales from its power systems segment, formally agreed on the purchase at a board meeting on Tuesday, following reports over the weekend it was near the deal for the nuclear project.
The deal values Horizon at more than double what some analysts had expected.
Horizon has 90 staff based in Gloucester and is developing plans for a series of new nuclear power stations at Wylfa on the Isle of Anglesey and at Oldbury-on-Severn in Gloucestershire. Hitachi plans to build at least two of its Advanced Boiling Water Reactors (ABWR) at each location.
Hitachi said it planned to spend approximately 60pc of the build cost in the UK and has signed memoranda of understanding with Rolls Royce and Babcock International for work on the projects.
The transaction is expected to be completed next month.
Prime Minister David Cameron welcomed the deal as a “decades-long, multi-billion pound vote of confidence in the UK, that will contribute vital new infrastructure to power our economy.
“It will support up to 12,000 jobs during construction and thousands more permanent highly skilled roles once the new power plants are operational, as well as stimulating exciting new industrial investments in the UK’s nuclear supply chain."
The price offered by the Japanese group, which beat a rival bid by Westinghouse Electric, was more than double what most analysts had expected.
Hiroaki Nakanishi, president of Hitachi, said this deal marked the group's "100-year commitment to the UK and its vision to achieve a long-term, secure, low-carbon and affordable energy supply".
The UK, one of only three western European nations with plans to build atomic reactors, has budgeted £110bn to replace aging power plants, upgrade grids and cut pollution.
The UK industry has set out plans to build 16 gigawatts of nuclear power by 2025 and the government has designated eight sites for plants.