Westinghouse changes hands again as Cameco buys into $7.9 billion deal

Brookfield Renewable would add its 17 percent interest in Westinghouse to a portfolio of about 124,000 MW of hydroelectric, wind, solar, and storage facilities—24,000 MW installed and 100,000 MW under development—in North America, South America, Europe, and Asia.

The deal, in context: The total enterprise value for Westinghouse is $7.875 billion. Existing debt of about $3.4 billion will be assumed by the purchasers, with the estimated $4.5 billion equity cost being met by investments of about $2.3 billion from Brookfield Renewable and its institutional partners, and of about $2.2 billion from Cameco.

Brookfield acquired Westinghouse from Toshiba Corp. out of bankruptcy in 2018, and in the five years since has “appointed a new world-class management team and successfully repositioned the business by strengthening the organizational structure, refocusing its product and service offerings, optimizing the global supply chain, and investing in new technology.”

According to Brookfield Business Partners, Westinghouse’s profitability nearly doubled under the company’s ownership, and, when combined with distributions received to date, the company’s expected proceeds from the sale will be about six times its invested capital, with $4.5 billion of total profit.

Cameco likes what it sees: According to Cameco’s news release, Westinghouse provides services to about half of the nuclear power sector and is the original equipment manufacturer to more than half the global nuclear reactor fleet. The acquisition “is expected to align Cameco’s uranium production and fuel services capabilities with Westinghouse’s downstream capabilities to potentially offer utilities a highly competitive nuclear fuel solution to deliver value for existing and new customers. This could include offering customers more efficient access to fuel supplies sourced in North America and Europe.”

Westinghouse has four key business lines.

Operating Plant Services: recurring service provider for outages and maintenance, engineering solutions, and replacement components and parts.

Nuclear Fuel: long-term contracting for the manufacturing and installation of fuel assemblies and other ancillary equipment across multiple light water reactor technologies, including as the original equipment manufacturer for approximately half of nuclear plants worldwide.

Energy Systems: designing, engineering, and supporting the development of new nuclear reactors, including the AP1000 pressurized water reactor and the eVinci microreactor.

Environmental Services: services to government and commercial customers that support nuclear sustainability, environmental stewardship, and remediation.

CEOs speak: “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 officer of Cameco. “This transaction fits perfectly within Cameco’s strategy and is expected to increase our ability to meet the growing needs of existing and new customers at a time when origin and security of supply is of significant concern. At the same time, we expect the recurring demand for Westinghouse’s operating plant services and nuclear fuel will generate a strong revenue stream and add stable cash flow to complement Cameco’s existing uranium and fuel services business.”

“This is the start of an exciting new chapter for the Westinghouse team and for nuclear power,” said Patrick Fragman, president and CEO of Westinghouse, in an October 11 news release. “We are grateful to [Brookfield Business Partners] 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.”

“Westinghouse has successfully refocused on providing core services to the nuclear industry and is ready for the next phase of growth,” said Connor Teskey, CEO of Brookfield Renewable. “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.”