MONTREAL - SNC-Lavalin's shares inched up slightly in the first trading Thursday after the federal government announced the sale of the Atomic Energy of Canada Ltd. to the Montreal-based engineering giant.
Shares gained 50 cents at $57.05 in early trading on the Toronto Stock Exchange.
The sale to the sole bidder for AECL was widely anticipated. The shares have increased about six per cent since word leaked earlier this week about an impending agreement.
Analysts say investors will "breathe a sign of relief" that SNC will purchase the nuclear operation's commercial division for $15 million plus future royalties.
Maxim Sytchev of Northland Capital Partners said the acquisition will remove another overhang on SNC-Lavalin shares which down by five per cent so far this year.
The Toronto analyst has said that SNC would only pay for AECL's refurbishment work.
The announcement "confirms SNC-Lavalin's conservative nature," he wrote in a report.
AECL has cost taxpayers $1.2 billion over the past five years.
SNC (TSX:SNC) has promised to protect 1,200 AECL jobs, but neither the company nor the federal government would say what will happen to the other 800 employees.
Natural Resources Minister Joe Oliver insisted the deal, which is set to close in October, will "revitalize" a Canadian industry that employs about 30,000 people.
Under the deal, AECL's three main businesses -- its lucrative repair business, reactor services and new builds -- will be taken over by a new SNC subsidiary called CANDU Energy.
The federal government will retain ownership of CANDU intellectual property and provide SNC with an exclusive licence for the technology. But Ottawa will be able to collect royalties from any future sales, which Oliver said could reach about $285 million over 15 years.
