Brookfield Business Partners is exploring options including the sale of a minority stake in Westinghouse Electric Co that could value the U.S. nuclear power developer and servicer at as much as $10 billion including debt, people familiar with the matter said on Friday.
The sale plans come as the nuclear power sector may benefit from President Joe Biden’s push to tackle climate change. Biden unveiled a target to slash America’s carbon emissions by the end of the decade to 50% of what they were in 2005, and included nuclear power in the potential energy mix to achieve this goal.
While critics argue it is more expensive than renewable power sources and poses heightened safety risks, Westinghouse is among the companies seeking to develop smaller nuclear reactors, which are billed as cheaper and easier to deploy.
Brookfield Business Partners has hired investment banks to engage with potential buyers for a minority stake in Westinghouse, the sources said, requesting anonymity as the discussions are private.
The sources cautioned that there is no certainty Brookfield will find a buyer and that an outright sale of the company is also an option. Brookfield Business Partners and Westinghouse declined to comment.
Brookfield Business Partners Chief Executive Cyrus Madon said on a Feb. 5 earnings call that it could “test the market” in relation to Westinghouse.
“We could hang onto it and continue milking these incredible cash flows, but it will all come down to what’s the value we can get versus what we can create by keeping it,” Madon said.
One of the most storied names in the American power industry, Westinghouse was acquired by Brookfield Business Partners, an affiliate of Canadian asset manager Brookfield, in 2018 for $4.6 billion, including debt, from Toshiba Corp.
Westinghouse’s earnings before interest, tax, depreciation and amortization (EBITDA) were $650 million in 2020, up from $440 million in 2018. On the February call, Madon said dividend payments from Westinghouse had almost covered Brookfield’s initial equity investment.
