BY Richard Summerfield
Berkshire Hathaway’s energy unit has agreed to acquire Dominion Energy Inc’s natural gas transmission and storage network for $4bn.
The deal gives Berkshire Hathaway Energy, a unit of the parent company Berkshire Hathaway, that already runs a $100bn energy portfolio, ownership of almost 8000 miles of natural gas transmission lines, and transport capacity of almost 21 billion cubic feet a day.
The deal, which is subject to regulatory approvals, is expected to close in the fourth quarter of 2020. The Berkshire unit will also assume $5.7bn of debt, giving the transaction a $9.7bn enterprise value.
“Today’s announcement further reflects Dominion Energy’s focus on its premier state-regulated, sustainability-focused utilities that operate in some of the most attractive regions in the country,” said Thomas F. Farrell, II, chairman, president and chief executive of Dominion Energy.
“Over the past several years the company has taken a series of steps – including mergers with Questar Corporation and SCANA Corporation, and the divestiture of Blue Racer Midstream and merchant generation assets – to increase materially the state-regulated nature of our profile, enhance the customer experience, strengthen our balance sheet, and improve transparency and predictability,” he added. “Our mission over that period has remained the same: providing round-the-clock affordable and sustainable energy, world-class customer service, and meaningful community engagement.”
“I admire Tom Farrell for his exceptional leadership across the energy industry as well as within Dominion Energy,” said Warren Buffett, chairman of Berkshire Hathaway. “We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business.”
The acquisition is Berkshire’s biggest since 2015, yet it is small by the company’s usual standards. Berkshire Hathaway had $137bn in cash at the end of the first quarter 2020. Mr Buffett has been criticised by some for missing the stock market rally from the March lows.
Dominion and Duke Energy Inc separately announced on Sunday they would be abandoning their $8bn Atlantic Coast Pipeline, running under the Appalachian Trail and through West Virginia, Virginia and North Carolina.
News: Buffett's Berkshire to buy Dominion Energy gas assets for $4 billion