Shares of Cameco Corp surged over 20% following an announcement of a collaboration between the uranium company, Brookfield Asset Management Ltd, and the U.S. government to construct nuclear reactors in the United States. This partnership entails the U.S. government facilitating financing, permits, and approvals for new Westinghouse nuclear reactors valued at a minimum of $80 billion US in the U.S.
Brookfield and Cameco acquired Westinghouse in November 2023. Cameco’s CEO, Tim Gitzel, expressed confidence that the U.S. commitments to new builds will enhance trust in nuclear power’s growth trajectory and drive demand for Westinghouse’s and Cameco’s offerings.
Cameco’s shares rose by $25.36 to $146.62 on the Toronto Stock Exchange, while Brookfield Asset Management’s class A shares increased by $1.50 to $77.91. U.S. Commerce Secretary Howard Lutnick emphasized the government’s commitment to advancing nuclear technologies swiftly to bolster national security and critical infrastructure.
The partnership outlines that the U.S. government will receive a participation interest, allowing it to claim 20% of cash distributions exceeding $17.5 billion US from Westinghouse post-approval. This interest is subject to the U.S. government’s final investment decision and definitive agreements to execute the construction of at least $80 billion US worth of new Westinghouse nuclear reactors in the U.S.
Moreover, the U.S. government retains the option, under specific conditions, to convert the participation interest into a warrant for purchasing shares in Westinghouse’s initial public offering, equating to 20% of the company’s public value minus $17.5 billion US.