Currency:
- Westinghouse is an industry leader with a strong market position across the nuclear value chain
- Nuclear power expected to see significant growth driven by energy security and decarbonization trends
- Acquisition will provide opportunities to generate value and grow the business globally
Brookfield Renewable, with its institutional partners, will own a 51% interest in Westinghouse and
Bringing together Cameco’s expertise in the nuclear industry with Brookfield Renewable’s expertise in clean energy positions nuclear power at the heart of the energy transition and creates a powerful platform for strategic growth across the nuclear sector.
The total enterprise value for Westinghouse is
Brookfield Renewable is pursuing this opportunity through the Brookfield Global Transition Fund I (“BGTF I”), which is the largest fund in the world focused on the energy transition. Brookfield Renewable, which has significant available liquidity, expects to invest approximately
Brookfield Renewable is among the world’s largest investors in clean energy and transition assets, with approximately 125,000 MW of operating and development capacity worldwide.
Investment highlights
- An industry leader: Westinghouse services about half the nuclear power generation sector and is the original equipment manufacturer to more than half the global nuclear reactor fleet. The company has industry-leading intellectual property and a specialized workforce of roughly 9,000 employees capable of operating in highly regulated markets around the world.
- Stable and reliable revenues: Approximately 85% of Westinghouse’s revenue has come from long-term contracted or highly recurring customer service provision with a nearly 100% customer retention rate given its comprehensive services offerings and position as an original equipment manufacturer, providing stability in all macroeconomic environments.
- Multiple avenues for growth: With strong growth projected in the nuclear energy market, Westinghouse is well positioned to increase business in its core fuel and services segments, execute on the growing pipeline for extending and uprating nuclear power plants, and service the rising demand for new utility-scale and modular baseload nuclear power generation.
- Compelling partnership opportunity:
Cameco and Brookfield Renewable are well placed to build a global player in the clean-energy transition. 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 inNorth America andEurope .
“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
“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 prioritizes electrification, decarbonization and energy security. The opportunity to partner with Brookfield Renewable, a leader in the clean-energy space, to acquire Westinghouse is expected to create a platform for growth across the nuclear value chain. Coupled with our more than 30-year proven track record of providing secure and reliable fuel supplies to a global customer base, 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.”
“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
Market trends
The consortium partners see several major external trends that are expected to benefit the acquisition of Westinghouse, including:
- Critical transition technology: Nuclear power is the one of the only zero-emission, baseload sources of electricity currently available at scale. Driven by electrification, decarbonization and energy security benefits, an estimated 400 GW of additional nuclear capacity will be needed by 2050.
- Accelerating growth plans: Nuclear power is experiencing a resurgence around the world with more than 20 countries across the
Americas ,Europe , theMiddle East andAsia pursuing new projects or plant extensions. More than 50 GW of plant extensions have been announced to date and more than 60 GW of new-build reactors are expected between 2020 and 2040. - Energy security: Energy supply chains are coming under stress as a result of geopolitical uncertainty. In the short-term, the transaction provides the opportunity to win new business supporting dozens of nuclear facilities across Eastern European countries traditionally served by
Russia . In the medium term, demand for stable supply of nuclear fuel and technology is expected to grow substantially, commensurate with the growth in nuclear power generation as countries look to increase energy security. - Technology advancements: There are multi-decade growth opportunities in the rollout of next-generation advanced nuclear technology and long-term nuclear energy storage solutions. Modular baseload generation, such as Westinghouse’s eVinci micro-reactor technology, can play a growing role in an increasingly decentralized and decarbonized energy system.
Business summary
Westinghouse’s history in the energy industry stretches back over a century, during which time the company became a pioneer in nuclear energy. Today Westinghouse is an industry leader providing mission-critical and specialized technologies, products and services across most phases of the nuclear power sector.
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 the nuclear plants worldwide.
- Energy Systems: Designing, engineering and supporting the development of new nuclear reactors.
- Environmental Services: Services to government and commercial customers that support nuclear sustainability, environmental stewardship and remediation.
Background to the transaction
The transaction follows the turnaround of Westinghouse by Brookfield Business Partners (“BBU”) – the industrials and services business of Brookfield Asset Management – which acquired the business in 2018. Under BBU’s ownership Westinghouse has refocused on core nuclear services, reduced its operating cost base and pursued several complementary M&A transactions to strengthen its in-house expertise.
This transaction was unanimously approved by the independent directors of Brookfield Renewable based, in part, on the recommendation of a committee of independent directors who assessed the fairness of the transaction from a financial perspective. The independent committee received an opinion as to the financial fairness of the consideration from Greenhill & Co.
The transaction is also subject to the required approval of BBU unitholders that are not affiliated with Brookfield Asset Management, as well as customary closing conditions and regulatory approvals. The consortium and BBU have entered into support agreements with BBU unitholders who collectively own approximately 37% of the votes eligible to be cast, to vote in favor of the transaction at the approval meeting. Closing is anticipated in the second half of 2023.
For further information regarding
A recorded version of the proceedings will be posted on the
| Contact information | |
| Brookfield Renewable | |
| Media: | Investors: |
| +44 7398 909 278 | +1 416-649-8196 |
| [email protected] | [email protected] |
| Media: | Investors: |
| 306-385-5541 | 306-956-6403 |
| [email protected] | [email protected] |
About Brookfield
Brookfield Renewable operates one of the world’s largest publicly traded, pure-play renewable power platforms. Its portfolio consists of hydroelectric, wind, solar and storage facilities in
Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with approximately
About
About Westinghouse
Cautionary Statement Regarding Forward-looking Statements
Certain information in this press release, including statements regarding the percentages of the acquisition of Westinghouse; sources and uses of proposed financing scenarios; timeline of the acquisition of Westinghouse, including the anticipated closing thereof; expected investment of
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by us as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in (i) the “[Risk Factors]” section of Brookfield’s current annual report on Form 20-F and in Brookfield’s other materials filed with the
Source:
| Title | Document |
|---|---|
| Download this Press Release |