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Uranium Miner Cameco to Buy Stake in Westinghouse Electric

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(Bloomberg) — Uranium miner Cameco Corp. is buying a stake in nuclear-power giant Westinghouse Electric Co., teaming up with Brookfield Renewable Partners in a deal valuing the business about $8 billion.

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Saskatoon, Saskatchewan-based Cameco will own 49% of the company, and Toronto-based Brookfield Renewable will own a 51% stake, according to a statement Tuesday. Brookfield Business Partners had bought Westinghouse in 2018 as part of the nuclear company’s bankruptcy reorganization.

The deal is the latest indication that big investors and governments see nuclear power as a key player in the fight against climate change. While some clean-energy advocates continue campaigning for the end of nuclear power, proponents say it will be challenging to wean power grids off fossil fuels without it.

“This is our entry into the nuclear-power segment, which is we believe a critical technology for global grids to achieve net zero,” Connor Teskey, chief executive officer of Brookfield Renewable, said in an interview Tuesday.

Read: Brookfield’s Carney Says Net-Zero Doesn’t Work Without Nuclear

Cameco, North America’s largest uranium miner, struggled for years following the Fukushima disaster in Japan that led to the shuttering of most of the country’s nuclear reactors as well as prompting nations around the globe to reconsider nuclear power. While the company’s shares have surged by about 190% since the beginning of 2020, Chief Executive Officer Tim Gitzel said earlier this year that he wouldn’t soon crank up production to chase “mythical” market demand.

Buying Westinghouse will give the company more direct access to customers that will need its fuel. “We like to think of ourselves as more than just mining and this is just an extension of that,” Gitzel said in the interview Tuesday. “We know what they do, and their business is very complementary to what we do.”

He expects the deal to be accretive to cash flow and earnings, but he declined to provide numbers. Cameco fell about 12% in late trading Tuesday in New York.

Cameco committed $2.2 billion in equity toward the acquisition. Brookfield Renewable’s $2.3 billion equity stake will be funded by the Brookfield Global Transition Fund, the company and the fund’s limited partners.

(Updates with quotes from CEOs in fourth and sixth paragraphs.)

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A consortium of two publicly traded companies and others plan to acquire Westinghouse Electric Co. in a $7.9 billion deal. The deal, which will close sometime in 2023, will see Cameco (NYSE: CCJ) and Brookfield Renewable (NYSE: BEP) acquire Westinghouse from Brookfield Business Partners. Brookfield Business Partners disclosed earlier this year it was trying to sell Westinghouse after it bought the company out of bankruptcy in 2018 from its previous owners, Toshiba.

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