Cameco and Brookfield Renewable Partners alongside its institutional partners have agreed to jointly acquire nuclear power company Westinghouse Electric in a $7.87bn deal from Brookfield Business Partners and its institutional partners.
Brookfield Renewable Partners along with its institutional partners will own a stake of 51% in Westinghouse Electric. The remaining 49% will be held by Cameco, a Canadian supplier of uranium fuel for nuclear energy.
Westinghouse Electric is said to service nearly 50% of the global nuclear power generation sector. It is also claimed to be the original equipment manufacturer (OEM) to more than 50% of the nuclear reactor fleet around the world.
The company has a workforce of nearly 9,000 people to handle its four main business lines of operating plant services, nuclear fuel, energy systems, and environmental services.
It was acquired out of bankruptcy in 2018 by Brookfield Business Partners, which is the industrials and services unit of Brookfield Asset Management. Under Brookfield Business Partners’ ownership, Westinghouse Electric is said to have put its focus back on core nuclear services, brought down its operating cost base, and pursued various complementary mergers and acquisitions to bolster its in-house expertise.
Brookfield Business Partners CEO Cyrus Madon said: “We are pleased to have reached an agreement to sell Westinghouse that crystalises meaningful value for our investors and provides significant proceeds to support our continued growth.
“We have significantly enhanced the business’ operations over the past four years, increasing its margins and strengthening its global leadership position. Westinghouse is an exceptionally well-run business today and has a great future.”
Subject to closing adjustments, the current debt structure of Westinghouse Electric will remain in place. This leaves a projected equity cost of $4.5bn to the buyer consortium.
The equity cost will be proportionately shared between Brookfield Renewable Partners and its institutional partners, which comes to around $2.3bn, and a sum of nearly $2.2bn to Cameco.
Cameco president and CEO Tim Gitzel said: “We’re witnessing some of the best market fundamentals we’ve ever seen in the nuclear energy sector.
“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 opportunity to partner with Brookfield Renewable, a leader in the clean-energy space, to acquire Westinghouse is expected to create a platform for growth across the nuclear value chain.”
The deal, which is subject to Brookfield Business Partners’ unitholder approval, approvals from regulators, and other customary conditions, is anticipated to close in H2 2023.
