A Berkshire Hathaway Inc. unit agreed Wednesday to buy Las Vegas utility NV Energy Inc. in a deal that values the company at about $5.59 billion with an enterprise value of close to $10 billion.
MidAmerican Energy Holdings Co. agreed to pay $23.75/share for NV, which is about 23% higher than the utility’s closing price on Wednesday. The transaction, subject to state and federal approvals, is set to close in early 2014.
“By joining forces with MidAmerican, NV Energy will gain access to additional operational and financial resources and the strength of a global energy partner as we continue to support the evolving energy needs of our state,” said NV Energy CEO Michael Yackira. “One area where MidAmerican will add immediate value is in our work with public policy leaders and regulators to help reshape Nevada’s energy future for the benefit of customers and our state.
“We will be able to combine MidAmerican’s expertise in renewable energy with the vast renewable resources in Nevada as we consider and develop new, zero and low-carbon generation options.”
MidAmerican CEO Greg Abel said part of what attracted the company to NV Energy “is its solid commitment to the state of Nevada” and its performance as a high-quality energy company. MidAmerican also has been impressed by Yackira, said Abel.
NV Energy has a three-part strategy to meet the energy needs of Nevada that includes energy efficiency programs, renewables and new generation. Earlier this year it submitted an “NVision” to the state legislature to retire at least 800 MW of coal-fired generation by the end of 2019, allowing up to 350 MW of renewables and another 550 MW of gas-fired or other generation to be developed (see Daily GPI, May 24).
NV Energy would operate under its current name as a separate subsidiary of MidAmerican and continue to be based in Las Vegas once the transaction is completed.
MidAmerican’s regulated utilities would serve an estimated 8.4 million customers with NV Energy’s included, and it would have total assets worth about $66 billion. NV Energy’s Sierra Pacific and Nevada Power units have reduced expenses to counterbalance lower revenue. The company’s 1Q2013 earnings were up 76% year/year on reduced expenses.
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