MidAmerican to add NV Energy to its bulging utility portfolio

Originally published by GenerationHub on May 29

MidAmerican Energy Holdings, a subsidiary of Berkshire Hathaway, and NV Energy (NYSE:NVE) announced May 29 the latest utility industry mega-merger.

The companies said they have reached a definitive acquisition agreement whereby MidAmerican will acquire NV Energy, an energy holding company serving about 1.3 million electric and natural gas customers in Nevada.

Notable is that this would give Warren Buffett’s Berkshire Hathaway three utility holding companies; MidAmerican Energy Co. (power plants in the Midwest), NV Energy (Nevada) and PacifiCorp (plants in several western states like Wyoming and Utah). Berkshire Hathaway also owns the BNSF Railway, one of two major western U.S. railroads, which hauls coal to many of the power plants controlled by these utility companies.

Under the terms of the agreement, MidAmerican will purchase all outstanding shares of NV Energy’s common stock for $23.75 per share in cash. The transaction, which has been unanimously approved by both companies’ boards of directors, has an enterprise value of approximately $10bn.

The acquisition is subject to customary closing conditions, including the approval of the transaction by NV Energy’s shareholders and the receipt of required state and federal approvals. The deal is expected to be completed in the first quarter of 2014.

NV Energy cites compatible renewable energy goals

Greg Abel, MidAmerican Chairman, President and CEO, said: “This partnership combines the strengths of two companies that share a common goal of serving our customers well through operational excellence and enhancing value for the communities we serve. Part of what attracted MidAmerican to NV Energy is its solid commitment to the state of Nevada and its performance as a high-quality energy business that has a strong focus on customer satisfaction, safety, environmental stewardship, and employee commitment.”

Abel added: “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. We are very excited about the strategic direction of Michael Yackira and his team; it is an excellent fit with our business model and customer focus.”

“By joining forces with MidAmerican, we will gain access to additional operational and financial resources as we continue to position NV Energy to support the evolving energy needs of our state and work with public policy leaders and regulators to reshape Nevada’s energy future,” said Yackira, President and CEO of NV Energy. “Importantly, 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.”

NV Energy will operate as a separate corporate subsidiary of MidAmerican Energy Holdings under its current name and will continue to be headquartered in Las Vegas.

“This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada’s economy,” said Buffett, chairman of Berkshire Hathaway. “Through MidAmerican, we have found in NV Energy a great company with similar values, outstanding assets, and a superb management team.”

Upon completion of this transaction, MidAmerican Energy Holdings will have assets of approximately $66bn and its regulated electric and gas utilities will serve 8.4 million customers.

Headquartered in Las Vegas, NV Energy is a holding company whose principal subsidiaries, Nevada Power and Sierra Pacific Power, are doing business as NV Energy. Serving a combined service territory of nearly 46,000 square miles, NV Energy provides a wide range of energy services and products to about 2.4 million citizens of Nevada and nearly 40 million tourists annually.

MidAmerican Energy Holdings, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related businesses, MidAmerican provides electric and natural gas service to more than 7 million customers worldwide. These businesses are: Pacific PowerRocky Mountain Powerand PacifiCorp Energy, comprising PacifiCorp; MidAmerican Energy Co.; Northern Powergrid HoldingsNorthern Natural GasKern River Gas TransmissionMidAmerican Transmission;MidAmerican Renewables; and CalEnergy Philippines.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.