GE and Hitachi have signed a letter of intent to negotiate the formation of a global alliance that will combine their new nuclear power plant and services businesses.

The transaction will proceed through a cross-shareholding arrangement under which Hitachi will take a 40 percent holding in GE’s existing nuclear business and GE will take approximately 20 percent holding in Hitachi’s existing nuclear business. The parties anticipate that the transaction will be completed in the first half of 2007, subject to all required approvals and negotiation of the definitive agreement.

The companies believe the move will strengthen GE and Hitachi’s existing boiling water reactor capabilities in the light water reactor industry and position the alliance for expansion into new nuclear energy segments and technologies. Potential areas of investment include new infrastructure, advanced reactor design, and service technology, with a focus on new spaces across the industry value chain.