Shares of Cameco Corp surged over 20% following the announcement of a partnership agreement between the uranium company, Brookfield Asset Management Ltd, and the U.S. government to support the construction of nuclear reactors in the United States. The deal involves the U.S. government providing financing and facilitating approvals for new Westinghouse nuclear reactors totaling at least $80 billion US.
Brookfield and Cameco completed the acquisition of Westinghouse in November 2023. Cameco’s CEO, Tim Gitzel, expressed optimism about the partnership, emphasizing the potential growth in demand for nuclear power products and services. He highlighted the role of Westinghouse’s reactor technologies in expanding nuclear capacity globally.
Trading on the Toronto Stock Exchange saw Cameco shares rise to $146.62, up $25.36, while Brookfield Asset Management class A shares increased to $77.91, gaining $1.50. U.S. Commerce Secretary Howard Lutnick praised the partnership, emphasizing its significance for national security and critical infrastructure.
As per the agreement, the U.S. government will receive a participation interest entitling it to 20% of cash distributions exceeding $17.5 billion US from Westinghouse. To activate this interest, the government must finalize investment decisions for the construction of the designated nuclear reactors. Additionally, the U.S. government may have the option to convert the participation interest into a warrant for purchasing shares in Westinghouse’s IPO equivalent to 20% of the company’s public value at the time, with adjustments made for the $17.5 billion threshold.
