Canada has sold its atomic energy firm to the nation's largest engineering company SNC-Lavalin, Natural Resources Minister Joe Oliver announced Wednesday.

SNC-Lavalin has been a longtime partner in Atomic Energy of Canada Limited's reactor sales and servicing, and ended up as the sole bidder for the embattled Crown corporation after others dropped out of contention.

It is paying $15 million for AECL's Candu reactor sales and service division, which is being split from its Chalk River research laboratory and reactor used for producing medical isotopes, which Ottawa will continue to own.

As well, Ottawa will receive royalties from the future sales of reactors through a licensing agreement.

Ottawa had been looking to dump AECL after sinking $2.5 billion dollars into failed research and development, and support for its commercial sales over the past five years.

"This is the best deal in a difficult domestic and international environment," said Oliver. "It does preserve the CANDU business, which has been in a challenging situation, and allows Canadians to benefit from its future success."

An Ontario pension fund earlier this year walked away from jointly purchasing AECL with SNC-Lavalin, as Japan's woes dimmed the market prospects for new nuclear plants

The Ontario Municipal Employees Retirement System would have brought financial heft to the partnership, offering buyers loan guarantees for reactor purchases and assuming cost overruns.

But it was reportedly concerned that SNC-Lavalin did not have a long-term vision of the nuclear business, and that the disaster in Japan would further hinder the market.

According to reports, SNC-Lavalin is expected to focus on servicing and refurbishing AECL's existing Candu reactors and not introduce new product lines.

Competitors are developing next-generation nuclear reactors.

Tweet

Related Links Nuclear Power News - Nuclear Science, Nuclear Technology Powering The World in the 21st Century at Energy-Daily.com