Brookfield Renewable Partners and uranium miner Cameco have teamed up to buy nuclear power firm Westinghouse Electric in a $7.88bn (€8.1bn) deal.
Brookfield, investing on behalf of the Brookfield Global Transition Fund I fund, will own a 51% interest in Westinghouse and Cameco will take a 49% stake in the company being sold by Brookfield Asset Management’s industrials and services business arm Brookfield Business Partners (BBU).
BBU – which acquired Westinghouse in 2018 – has refocused on core nuclear services, reduced its operating cost base and “pursued several complementary mergers and acquisitions to strengthen its in-house expertise”. Westinghouse currently services about half of the nuclear power generation sector and is the original equipment manufacturer for more than half of the global nuclear reactor fleet.
The new buyers said Westinghouse’s existing debt structure will remain in place, leaving an estimated $4.5bn equity cost to the consortium. The deal gives Westinghouse a $7.88bn enterprise value.
Brookfield said it expects to invest $750m to acquire an approximately 17% interest in Westinghouse, which will be funded through normal course funding initiatives, including asset-level upfinancings and asset recycling. Cameco is acquiring its stake through a combination of cash, debt and equity.
The deal highlights a renewed interest in nuclear power which is expected to see significant growth driven by energy security and decarbonisation trends, a topic discussed among institutional investors at the IPE Real Assets & Infrastructure Global Investor Conference in Munich last month.
Mark Carney, Brookfield’s vice-chair and head of transition investing, said: “Every credible net-zero pathway relies on significant growth in nuclear power. It is an essential, reliable zero-carbon technology that directly displaces fossil fuels and supports the growth of renewables by providing critical baseload to our grids.
“The partnership of Brookfield and Cameco will help drive forward the growth of nuclear power the world needs for its clean energy transition.”
Tim Gitzel, president and CEO of Cameco, 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 prioritises electrification, decarbonisation and energy security.”
Connor Teskey, CEO of Brookfield Renewable, said: “Westinghouse has successfully refocused on providing core services to the nuclear industry and is ready for the next phase of growth. The business aligns well with our existing portfolio, delivering highly contracted and dependable revenue by serving customers who operate critical clean-energy assets.
“Partnering with Cameco brings deep nuclear sector expertise, alongside our knowledge of energy markets and global customer base, to form a formidable champion for nuclear power. We see significant potential to grow the business and deliver on broader growth in the nuclear power sector through our strategic partnership with Cameco.”
The deal, subject to approvals, is expected to close in the second half of 2023.
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