It’s a deal: SNC-Lavalin buys AECL’s CANDU business
On June 29, SNC-Lavalin confirmed that it had agreed with the Government of Canada to acquire assets of Atomic Energy of Canada's (AECL) commercial reactor division.
On June 29, SNC-Lavalin confirmed that it had agreed with the Government of Canada to acquire assets of Atomic Energy of Canada’s (AECL) commercial reactor division.
The purchase is being made by CANDU Energy, a wholly-owned subsidiary of SNC-Lavalin. The purchase price is $15 million and royalty payments from future new build and life extension projects.
AECL will retain its past liabilities.
The company said that approximately 1,200 employees are expected to move from AECL to CANDU Energy.
AECL is a 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. It has built 34 reactors in seven countries.
In a press release, SNC-Lavalin said that “AECL has made a significant contribution to a key Canadian sector but in its current form, AECL was judged to be no longer sustainable. The privatization of AECL is an important turning point to allow for a new competitive business model, following years of challenges faced by AECL, and is an endeavour to keep alive the Canadian nuclear industry.”
Joe Oliver, Canada’s Minister of Natural Resources, said the transaction would ensure the CANDU technology is “in proven, competent hands to be serviced and deployed in Canada and abroad, meeting energy needs and stimulating a supply chain located largely in Canada.”
SNC-Lavalin also noted that Candu technology is critical to sustaining Canada’s nuclear industry, which currently employs more than 30,000 workers in 150 companies across Canada.
The company also said that they would be receiving up to $75 million from the federal govnerment to work towards completing the Enhanced CANDU reactor (EC6) development program.
It will be targeting building new nuclear projects in Ontario and in countries such as Jordan, Romania, Argentina, Turkey and China.
CANDU Energy will also complete plant extension projects at Bruce Power, Wolsong, Point Lepreau and Gentilly-2 through subcontract service agreements with the Canadian government.
The acquisition is expected to be finalized in early fall 2011.