NRG Energy Inc. (NYSE:NRG), UniStar Nuclear Energy, Scana Corp. (NYSE:SCG) and Southern Co. (NYSE:SO) will have a running start over their competitors if they are
picked to split $18.5 billion in federal financing to help build a new generation of nuclear reactors, as The Wall Street Journal reported Wednesday.
Where will the deals flow from this development, which the newspaper says is the biggest step in reviving the U.S. nuclear industry in three decades after the disastrous Three Mile Island accident?
Clearly utilities with nuclear plants will be valued more than those with traditional coal- and natural gas-fueled power plants, as they will be more likely to meet new government emissions standards. That could lead to some big corporate deals in a sector that could still use some consolidation (Public Service Enterprise Group Inc. [NYSE:PEG], the failed target of Exelon Corp. [NYSE:EXC], comes to mind). Constellation Energy Group Inc. (NYSE:CEG) already agreed to sell half of its nuclear fleet to Electricite de France SA for $4.5 billion, and their UniStar joint venture is one of the four on the U.S. government's short list.
But the action could also ripple through the supply chain, creating parts suppliers and construction companies to feed the new builds. That will probably require new money and know-how -- probably from more active nuclear power developers in France and Japan -- through acquisitions, private equity and joint ventures (a la GE-Hitachi and Westinghouse-Mitsubishi).
It might already be happening. In January, Pasadena, Calif., construction and engineering company Tetra Tech Inc. (NASDAQ:TTEK) announced it acquired Oak Ridge, Tenn., nuclear science and engineering firm Haselwood Enterprises Inc. for undisclosed terms. Could more be in the offing? -
Claire Poole
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
