Brookfield Asset Management Unit Closes Deal to Sell 49% of Westinghouse to Cameco

Brookfield Business Partners bought the nuclear tech company out of bankruptcy in 2018 for $4.6 billion, while this deal values the company at $8.2 billion.

Brookfield Business Partners closed the sale of 49% of nuclear technology services company Westinghouse Electric Co. to Canadian uranium mining company Cameco Corp. last week, with Brookfield’s publicly listed affiliate, Brookfield Renewable Partners, taking a majority stake at 51%.

The total enterprise value of the deal is $7.9 billion, which was adjusted for working capital balances at the close and resulted in a final enterprise value of $8.2 billion. Westinghouse, however, has $3.8 billion in outstanding debt commitments stemming from its 2017 Chapter 11 bankruptcy, which reduced the equity cost of the acquisition. Late last week, the companies announced that they received all required regulatory approval for the sale.

Brookfield Business Partners, which is $850 billion Brookfield Asset Management’s business services and industrials unit, and its partners acquired Westinghouse out of bankruptcy in early 2018 for approximately $4.6 billion. Prior to the sale, Brookfield Business Partners’ economic interest was approximately 44%, with its partners owning the remainder of the company. Brookfield Business Partners first announced that it agreed to sell Westinghouse in October 2022.

“Since first announcing this deal a year ago, we believe the business prospects for Westinghouse have significantly improved,” Cameco CEO Tim Gitzel said in a statement. “The sustained and positive momentum for nuclear energy has been undeniable, as countries and companies around the world strive to meet their net-zero commitments and growing energy needs through clean and secure supply.”

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According to Brookfield Business Partners, following its acquisition of Westinghouse more than five years ago, it appointed a new management team and repositioned the business by altering its organizational structure, refocusing its product and service offerings, optimizing the global supply chain and investing in new technology. As a result, according to Brookfield, Westinghouse’s profitability has nearly doubled.

“We have significantly enhanced the business’ operations over the past four years, increasing its margins and strengthening its global leadership position,” Brookfield Business Partners CEO Cyrus Madon said in a statement in 2022 when the sale was announced. At the time, the company said its expected proceeds from the sale would be approximately six times its invested capital, with a 60% internal rate of return and $4.5 billion of total profit when combined with distributions received.

According to Brookfield Business Partners, it expects to generate approximately $1.8 billion in proceeds from the sale of its 44% stake in Westinghouse, with the remainder distributed to its institutional partners.

Cameco announced its plans to finance its share of the acquisition using all of its $600 million term loan, which will be drawn down at closing, along with available cash. It will not use the $280 million bridge commitment it secured concurrently with the acquisition agreement, adding that the commitment will be terminated.

As a limited partnership, Westinghouse will be governed by a six-person board of directors, three appointed by Brookfield Renewable Partners and three by Cameco. According to the announcement, decisions on “certain reserved matters … such as the approval of the annual budget, require the presence and support of both Cameco and Brookfield appointees to the board.”