Shares of Cameco Corp surged over 20% following an announcement of a partnership agreement between the uranium company, Brookfield Asset Management Ltd, and the U.S. government to aid in the construction of nuclear reactors in the United States. The U.S. government will facilitate financing, permitting, and approvals for a minimum of $80 billion US in new Westinghouse nuclear reactors in the country.
Brookfield and Cameco completed the acquisition of Westinghouse in November 2023. Cameco’s CEO, Tim Gitzel, expressed optimism about the partnership, stating that it will enhance confidence in nuclear power’s growth trajectory and boost demand for Westinghouse’s and Cameco’s products and services.
Cameco’s shares on the Toronto Stock Exchange rose by $25.36 to reach $146.62, while Brookfield Asset Management 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. He highlighted the partnership’s significance in meeting national security goals and strengthening critical infrastructure.
As part of the agreement, the U.S. government will receive a participation interest, granting it 20% of any cash distributions exceeding $17.5 billion US by Westinghouse post-approval. To activate the participation interest, the U.S. government must finalize investment decisions and enter into agreements for constructing at least $80 billion US worth of new Westinghouse nuclear reactors in the U.S.
Additionally, the U.S. government may, under specific conditions, convert the participation interest into a warrant to purchase shares during Westinghouse’s initial public offering, equivalent to 20% of the company’s public value at the time, after subtracting $17.5 billion US.