Warren Buffett’s MidAmerican Energy Holdings Company, a subsidiary of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) agreed to purchase NV Energy, Inc. (NYSE:NVE) for $23.75 per share or $5.6 billion in cash.
Last January, MidAmerican Energy Holdings Company acquired two solar projects in California for $2.5 billion from SunPower Corporation (NASDAQ:SPWR).
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NV Energy, Inc. (NYSE:NVE), is a holding company that provides a wide range of energy products and services for 2.4 million citizens in Nevada and 40 million tourists visiting the state every year through its subsidiaries, Nevada Power company and Sierra Pacific Power Company.
NV Energy BoD unanimously approve the deal:
The board of directors of NV Energy, Inc. (NYSE:NVE) unanimously approve the agreement. According to the company, the deal has an enterprise value of approximately $10 billion including debt. Both companies expect the deal to be complete in the first quarter next year.
In a statement, Buffett said, “This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada’s economy. Through MidAmerican, we have found in NV Energy a great company with similar values, outstanding assets, and a superb management team.”
According to Greg Abel, president and CEO of MidAmerican Energy the agreement combines the strength of the two companies with the common goal of serving customers well though excellent operations and enhancing value for communities each company serves.
Abel emphasized that MidAmerican Energy was attracted to NV Energy, Inc. (NYSE:NVE) because of its solid commitment to the state of Nevada and its performance as a high-quality energy business. He added, the company has a “strong focus on customer satisfaction, safety, environmental stewardship, and employee commitment.”
Furthermore, Abel said, “The benefits we bring to NV Energy are the resources and strength of a global energy partner that lends stability, expertise, and access to competitively priced capital to support NV Energy’s strategic focus.” Moreover, he said that the strategic direction of the company is an excellent fit with MidAmerican Energy’s business model and customer focus.
NV Energy’s President said:
On the other hand, Michael Yackira, president and CEO of NV Energy, Inc. (NYSE:NVE) said the deal will provide additional operational and financial resources for the company. “We will have the opportunity to combine MidAmerican’s expertise in renewable energy with Nevada’s vast renewable resources for the benefit of our customers and our state… This transaction will deliver important additional, long-term benefits to our customers and communities, as well as significant value to our shareholders,” said Yackira.
NV Energy, Inc. (NYSE:NVE) will become a subsidiary of MidAmerican Energy and it will retain its current business name and headquarters in Las Vegas.
The shares of NV Energy, Inc. (NYSE:NVE) are down by more than 2 percent to $19.28 per share after trading hours on Wednesday.
Meanwhile, Berkshire Hathaway, Inc. (NYSE:BRK.A) (BRK.B) recently bought 5 percent stake or 5,622,340 shares of Starz (NASDAQ:STARZA).