Cameco Corporation and Brookfield Renewable Partners are forming a partnership to acquire US nuclear services business Westinghouse Electric Company, signaling the growing interest in nuclear energy.
The $7.8 billion deal will see the pairing of Brookfield Renewable, one of the world’s largest clean energy investors, with the largest publicly-traded uranium supply company Cameco, and clearly represents nuclear’s increasingly important role in the energy transition.
“We’re witnessing some of the best market fundamentals we’ve ever seen in the nuclear energy sector,” said Tim Gitzel, president and chief executive of Cameco.
“As one of the few forms of electricity generation capable of safely, reliably and affordably producing emissions-free, baseload power, nuclear energy is becoming increasingly important in a world that prioritizes electrification, decarbonization and energy security.”
The partners are looking to leverage their respective expertise to create a strategic platform for growth across the nuclear sector. The deal comes amidst market trends which the partners believe demonstrate a new era of growth for nuclear not seen for decades.
According to Cameco, these noteworthy market trends include:
1. Critical transition technology: Nuclear power is one of the only zero-emission, baseload sources of electricity currently available at scale.
2. Accelerating growth plans: Nuclear power is experiencing a resurgence around the world with more than 20 countries across the Americas, Europe, the Middle East and Asia pursuing new projects or plant extensions.
3. Energy security: Energy supply chains are coming under stress as a result of geopolitical uncertainty. In the short-term, the transaction provides the opportunity to win new business supporting dozens of nuclear facilities across Eastern European countries traditionally served by Russia. In the medium term, demand for stable supply of nuclear fuel and technology is expected to grow substantially, commensurate with the growth in nuclear power generation as countries look to increase energy security.
4. Technology advancements: There are multi-decade growth opportunities in the rollout of next-generation advanced nuclear technology and long-term nuclear energy storage solutions.
Brookfield Renewable and partners will own a 51% interest in Westinghouse and Cameco will own 49%.
Westinghouse’s existing debt structure will remain in place, leaving an estimated $4.5 billion equity cost to the consortium.
The transaction follows the turnaround of Westinghouse by Brookfield Business Partners (BBU) – the industrials and services business of Brookfield Asset Management – which acquired the business in 2018.
Patrick Fragman, president and chief executive of Westinghouse, said in a statement: “We are grateful to BBU for its stewardship and investments that have strengthened Westinghouse’s position in the nuclear power industry, and more broadly in the clean power world, for the long-term.
“Now we are proud to join Brookfield Renewable and Cameco, reaffirming the important role played by Westinghouse and nuclear power in enabling the world’s clean energy transition and energy security goals.”
The transaction is expected to close in the second half of 2023.
