Doosan to acquire Mitsui Babcock

6 November 2006 — Doosan has concluded a share purchase agreement with Mitsui Engineering & Shipbuilding Co. of Japan to acquire U.K.-based Mitsui Babcock Energy Ltd., a boiler design and engineering company. Doosan will acquire the entire equity stake in Mitsui Babcock for 20 billion Japanese yen in a transaction that is expected to be completed by the end of the year.

According to a Doosan press release, independent source technologies for boiler are owned primarily by four companies in the world: 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. It owns and licenses the right to use proprietary technologies for the design and engineering of pulverized coal-fired boilers used in thermal power plants.

Mitsui Babcock has supplied boilers for operation in around 30 countries, including in the world’s three largest growth markets — the U.S., Europe and China. By bringing Mitsui Babcock under the umbrella of Doosan, the company expects to be able to compete more effectively with the other leading companies making use of advanced technologies in the global coal-fired thermal power generation market.

Doosan believes that the acquisition of Mitsui Babcock will better enable it to capitalize on the substantial growth opportunities that have been created in rejuvenated developed markets. Over the next 25 years, demand for coal-fired thermal power plants in the U.S., Europe and China is expected to be around $750 billion, according to an International Energy Agency estimate. Following its acquisition of Mitsui Babcock, Doosan will become a more competitive participant in the U.S. and European markets. The market in China also will be more attractive to Doosan as a result of its improved prospects for developing cooperative relationships with local power plant companies in China. To take advantage of these opportunities, Doosan intends to accelerate the development of Mitsui Babcock’s technologies for a next generation of more efficient and environmentally sensitive boilers. Doosan believes the annual sales of Mitsui Babcock could exceed $1 billion within a few years.