GE and Hitachi have agreed to begin negotiations on forming a global alliance that will combine their new nuclear powerplant and services businesses. The move echoes the recent purchase of Westinghouse Electric Co., Monroeville, Pa., by Tokyo-based Toshiba Corp. in partnership with the Shaw Group, Baton Rouge.

The GE-Hitachi alliance will execute a unified strategic vision that will draw on their respective strengths to improve and expand their boiling-water reactor technology offerings, Hitachi officials say. "We're pretty strong in the U.S. and Hitachi is strong in Japan," says Andrew C. White, president and CEO of GE's Nuclear Business, Wilmington, N.C. GE brings technology strength to the alliance and Tokyo-based Hitachi its construction capacity and its ability to supply large components for nuclear powerplants, he says. The parties' nuclear fuel business will not be included in the integration, Hitachi officials add.

The parties have agreed to a cross-shareholding arrangement under which Hitachi will buy 40% of GE's nuclear business and GE will buy approximately 20% of Hitachi's nuclear business. Both companies will continue their nuclear business operations, including construction and maintenance of nuclear powerplants and related services. Subject to antitrust and regulatory approvals in both Japan and the U.S., the intention is that the Japan market will be exclusively Hitachi¹s, while GE, under White¹s leadership and with Hitachi¹s participation, will serve the global market.

"It's a good marriage," says White. The two companies have worked together "on a technology-transfer basis" for years, but the global alliance would formalize the arrangement, he says. The parties expect to complete the transaction in the first half of 2007.