Canadian firms Cameco, Brookfield sign $80B US nuclear reactor deal with US government

Shares of Cameco Corp rose more than 20 percent after the uranium company and Brookfield Asset Management Ltd announced a partnership agreement with the US government to help build nuclear reactors in the United States.

Under the agreement, the US government will arrange financing for at least US$80 billion worth of new Westinghouse nuclear reactors in the US and facilitate permitting and approvals.

Brookfield and Cameco acquired Westinghouse in November 2023.

“We hope the new U.S. build commitments will foster broad confidence in the sustainable growth profile for nuclear energy and support growing demand for Westinghouse and Cameco’s products, services and technologies,” Cameco Chief Executive Tim Gitzel said in a statement.

“This new partnership highlights the role that Westinghouse’s reactor technologies, based on fully designed, licensed and operated reactors, are expected to play in the planned expansion of nuclear capacity and diversification of global nuclear supply chains.”

Cameco shares were up $25.36 at $146.62 on the Toronto Stock Exchange, while Brookfield Asset Management Class A shares were up $1.50 at $77.91.

US Commerce Secretary Howard Lutnick said the government is focused on ensuring the rapid development, deployment and use of advanced nuclear technologies.

“This historic partnership supports our national security objectives and enhances our critical infrastructure,” he said in a statement.

The partnership agreement will see the US government receive a partnership interest which, once vested, will be entitled to 20 percent of any cash distributions in excess of US$17.5 billion made by Westinghouse following the grant.

To vest the partnership interest, the US government must make a final investment decision and enter into definitive agreements to complete the construction of at least US$80 billion of new Westinghouse nuclear reactors in the US.

The US government will also be entitled, under certain circumstances, to convert the participation interest into warrants to purchase shares in an initial public offering by Westinghouse equal to 20 per cent of the company’s public value at that time after deducting US$17.5 billion.