Buffett's company to acquire NV Energy

by Jon Ralston Wed, 05/29/2013 - 11:26

UPDATED WITH HARRY REID QUOTE: 



"I've spoken to Warren Buffett, Michael Yackira and Phil Satre and it is not often I have been as enthused about a deal as I am now. I am elated. It is really good news for Nevada that Warren Buffet wants to invest $5.5 billion in our state. He told me that he loves Nevada and now has an excuse to come here more often."

 

Warren Buffett is coming to Nevada in a huge way.

The Berkshire Hathaway boss, through his energy subsidiary (MidAmerican), is acquring the Nevada energy utility. The plan is for the company to remain in Nevada with the current management team.

This is game-changing news with the country's most successful investor making a play in Nevada, showing confidence in the energy market and the state itself. Buffett is no raider who flips companies; he must like what he sees.

How huge is this?

 

This huge:

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 $10 billion. 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 transaction is currently expected to be completed in the first quarter of 
 
 
 
2014.

The news is fresh -- I'll update with details when I can.

 

More from the company:

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 Michael 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. While we will have new 
 
 
 
owners, NV Energy will remain a Nevada company, committed to the communities we serve, 
 
 
 
and our customers will continue to receive the safe and reliable service they have come to 
 
 
 
expect from our dedicated team of employees. This transaction will deliver important additional, 
 
 
 
long-term benefits to our customers and communities, as well as significant value to our 
 
 
 
shareholders.”  
 
 
 
NV Energy will operate as a separate corporate subsidiary of MidAmerican Energy 
 
 
 
Holdings Company 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 Warren 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 Company will 
 
 
 
have assets of approximately $66 billion and its regulated electric and gas utilities will serve 8.4 
 
 
 
million customers.
 
 
 
“I am pleased to be working with NV Energy’s dedicated employees and great 
 
 
 
management team,” said Abel. “We look forward to supporting them in executing their business 
 
 
 
plans, including their focus on expanding renewable resources and providing new technology for 
 
 
 
the benefit of their customers.” 
 
 
 
For NV Energy, Lazard Ltd. served as financial advisor and Sidley Austin LLP, Hogan 
 
 
 
Lovells and Reno-based Woodburn and Wedge served as legal advisors.

 

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