Its acquisition of a stake in the remnants of the huge Westinghouse Company puts BNFL in a good position to globalise its business, move into sectors outside waste reprocessing and perhaps allows it to escape the iron grip of the Treasury. But as the deal shows, making a break from state ownership will not be easy.
The deal gives BNFL a 14 per cent stake in Westinghouse Electric Company with the American company Morrison Knudsen taking the rest. It puts the company at the heart of the US nuclear complex, with the Department of Energy and the Pentagon two of its biggest customers.
Westinghouse is a giant in the nuclear business with a history that stretches back to the Second World War. It was the first company to produce pure uranium in volume, and built the first nuclear power plant in the US to generate electricity. The deal gives BNFL control over the nuclear technology behind nearly half of the world's reactors. It will have high hopes that President Bill Clinton's trip to Peking will clear the way for exports of new power plants to China.
BNFL is a public limited company, but it has only one shareholder: the British government. Under the Conservatives it was manoeuvring to loosen the Treasury's hold on its finances. But the arrival of Labour in office made that much harder. It had hoped that the final goal would be privatisation, allowing the company to act without the restrictions imposed by government accounting and political dictates.
The Westinghouse deal shows that it is still on a very tight rein. It had been under consideration for months and the Department of Trade and Industry had cleared the deal, but things suddenly went wrong. The concern was that BNFL might be biting off much more than it could chew. Westinghouse is a company involved in very sensitive sectors, and poses a huge management challenge. It also has financial liabilities of more than $1bn.
According to some sources, BNFL had not played a straight bat with the Government. It was given strict conditions by the Treasury for the deal but they were not met in full. Gordon Brown, the Chancellor, has intervened personally to inspect the deal, adding further conditions; BNFL met these at the last moment allowing the deal to go ahead on Friday. But it has left a lot of bad feeling on both sides.
A third of the company's turnover already comes from abroad, most of it from the company's subsidiary in the US. Earlier this year it bought Sierra Nuclear Corp, a company that specialises in interim storage of spent fuel, as part of a strategy to enlarge its presence abroad.
BNFL is also putting together a project that would combine its uranium fuel division with the nuclear activities of Siemens, the German engineering giant. Put together, these deals make BNFL a powerful world competitor. But the next step - into private ownership - still looks difficult.Reuse content