(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.
Most Read from Bloomberg
Here’s How Weird Things Are Getting in the Housing Market
Intel Plans Thousands of Job Cuts in Face of PC Slowdown
Home Flippers Get Burned by US Housing Market’s Sudden Slump
Jamie Dimon’s S&P 500 Bear Market: Brutal, Far From Unimaginable
It’s Official: The Fed’s in the Red
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.)
Most Read from Bloomberg Businessweek
The Twitter Deal Has Pierced Elon Musk’s Reality Distortion Field
The Great Post-Covid Online Shopping Bet Was a Costly Delusion
Even After $100 Billion, Self-Driving Cars Are Going Nowhere
Hedge Fund Managers Paid for Stockpicking Genius Aren’t Showing Much of It
A New Silicon Valley Emerges at the Arctic Circle
©2022 Bloomberg L.P.
