CANDU Energy, a unit of SNC-Lavalin Group Inc. (TSX: SNC), agreed with the Government of Canada to acquire Atomic Energy of Canada’s (AECL) commercial reactor division for C$15 million ($15.5 million) and royalty payments from future new build and life extension projects. AECL will retain its past liabilities.
Around 1,200 employees will move from AECL to CANDU Energy.
AECL is the Crown corporation responsible for managing Canada’s nuclear energy research and development program. The commercial reactor division began developing the CANDU technology in the 1950s and has built 34 reactors in seven countries. The privatization of AECL is seen as important to keeping alive the Canadian nuclear industry.
CANDU Energy will target new build projects in Ontario, Canada as well as in Jordan, Romania, Argentina, Turkey and China. The new company will also complete the remaining obligations under the ongoing life extension projects at Bruce Power, Wolsong, Point Lepreau and Gentilly-2 through subcontract service agreements with the Government of Canada.
The acquisition is expected to be finalized in early fall 2011, subject to the fulfillment of certain conditions including Competition Act compliance and other administrative approvals.
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