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United Nuclear Corporation - Lehman Brothers Collection

United Nuclear Corporation

List of Deals

The United Nuclear Corporation was formed in March 1961 as a joint venture between three existing companies: Olin Mathieson Chemical Corporation, Mallinckrodt Corporation of America, and Nuclear Development Corporation of America. Initially, Olin became the majority stockholder and Nuclear Development Corporation was absorbed into the new company. It began with 1,400 employees.

This firm was created in an effort to gain a greater share of the growing nuclear-related market. The company intended to serve both government and commercial customers. It expected to work on research and development, reactor system design, manufacture of nuclear fuel materials, reactor and core fabrications, fuel management, cold scrap processing, isotopes, and hot radiation energy sources.

The new concern took over all of Nuclear Development Corporation, Olin's nuclear fuel division and Mallinckrodt's nuclear operations at St. Louis and Hematite, Missouri. The combined operations were worth about $25 million at the time of the merger and the combined annual sales of the three companies' nuclear operations were estimated to be in excess of $30 million.

In March 1962 United Nuclear merged with Sabre-Pinon Corporation of Santa Fe, New Mexico. Sabre-Pinon held a majority interest in uranium mines and mills in the Ambrosia Lake area of New Mexico and a 65 percent interest in Homestake, New Mexico Partners, a uranium producer. At the time, United Nuclear was producing nuclear fuel materials and nuclear reactor cores at plants and laboratories in Connecticut, Missouri, and New York.

United Nuclear joined with Douglas Aircraft in 1965 in forming Douglas United Nuclear, a joint venture contracted with the U.S. Atomic Energy Commission to operate the AEC's reactor and fuel-fabrication facilities in Richland, Washington. The facilities included five plutonium production reactors and a fuel fabrication area that prepared uranium fuel for use in the reactors.

For several months during 1966, there was much speculation that the large oil company, Cities Service, was interested in acquiring United Nuclear as a way of entering the uranium mining and processing industry. United Nuclear also sought this merger as a way of obtaining additional capital. However, talks terminated in September 1966, because the Cities Service stock price was rising and the United Nuclear stock price was falling, making the deal less attractive.

In 1968 Olin Mathieson sold 22 percent of the outstanding stock of United Nuclear to Combustion Engineering Inc. Combustion was a maker of nuclear reactors and also supplied utilities with initial loads of nuclear fuel. United Nuclear officials opposed this sale, fearing an eventual take-over attempt by Combustion. Some public utilities were also concerned that a possible takeover by Combustion would limit competition among nuclear fuel suppliers. United Nuclear made it clear that despite Combustion's purchase of 22 percent of the company, none of the Combustion officials would be allowed on the board.

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