Doosan buys Mitsui Babcock

Doosan Heavy Industries & Construction in South Korea has sealed a share purchase agreement yesterday with Mitsui Engineering & Shipbuilding Co. in Japan to acquire UK-based Mitsui Babcock Energy Limited, one of the world’s leaders in boiler design and engineering. The $169.5 million buyout of Mitsui Babcock’s entire equity stake is expected to be completed by the end of this year.

Doosan Heavy, known as a world-class boiler manufacturer, emphasized that the acquisition will help it secure technologies for coal-fired boilers, a central piece of equipment used in thermal-generation power plants. By taking Mitsui Babcock into the fold, Doosan said it expects to be able to compete more effectively with other leading companies.

“This transaction is part of Doosan’s ongoing efforts to pursue global strategies that will make Doosan a recognized technology leader around the world, and it follows the successful completion of other key initiatives including the acquisition of AES of the United States and IMGB of Romania.,” Park Gee-won, Doosan’s executive vice president and project head, said in a statement. He emphasized that with the acquisition of Mitsui Babcock, Doosan will gain ownership of core technologies for thermal power plant boilers that will allow it to become a more complete boiler manufacturer.

Currently only four companies in the world own independent sources technologies for boilers – B&W and Foster Wheeler of the United States, Alstom of France and Mitsui Babcock. Mitsui Babcock was established by B&W in Britain in 1891 and was taken over by Mitsui Engineering & Shipbuilding Co. in 1995.

Park said the acquisition would strengthen the diversification of Doosan’s overseas operations, which are now concentrated in the Middle East and Asia, and thereby enhance the company’s presence in developed markets including the United States and Europe. Over the next 25 years, demand for coal-fired thermal power plants in the United States, Europe and China is expected to be around $750 billion, the International Energy Agency predicts.