Shares of Cameco Corp surged over 20% following the collaboration 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 partnership involves the U.S. government facilitating financing, permits, and approvals for a minimum of $80 billion US in new Westinghouse nuclear reactors in the country.
Brookfield and Cameco took over Westinghouse in November 2023. Cameco’s CEO, Tim Gitzel, expressed optimism about the deal, stating that the U.S. commitments to new nuclear builds will enhance confidence in nuclear power growth, driving demand for products and services from Westinghouse and Cameco.
Cameco’s stock price rose to $146.62 on the Toronto Stock Exchange, up $25.36, while Brookfield Asset Management class A shares increased by $1.50 to $77.91.
U.S. Commerce Secretary Howard Lutnick emphasized the government’s focus on advancing nuclear technologies swiftly. He described the partnership as historic, aligning with national security objectives and strengthening critical infrastructure.
As part of the agreement, the U.S. government will hold a participation interest, allowing it to receive 20% of cash distributions exceeding $17.5 billion US from Westinghouse. To activate this interest, the U.S. government must finalize investment decisions and sign agreements for the construction of at least $80 billion US in new Westinghouse nuclear reactors in the U.S.
Additionally, the U.S. government can convert the participation interest to a warrant under specific conditions, enabling it to purchase shares in Westinghouse’s initial public offering equivalent to 20% of the company’s public value after deducting $17.5 billion US.