Berkshire Hathaway Inc.'s power and natural-gas production company MidAmerican Energy Holdings Company has agreed to purchase Nevada-based electric utility firm NV Energy Inc. for about $5.6bn in an all-cash deal, as part of its strategy to boost its presence in the energy sector.
For the last few years, MidAmerican has been aggressively pursuing investment options in renewable energy projects.
Nevada has ample renewable energy resources such as wind, geothermal and solar, and NV Energy will be able to exploit these resources further with the help of MidAmerican's vast experience in this sector.
NV Energy currently serves approximately 1.3 million electric and natural gas customers in Nevada.
According to the terms of the definitive agreement, MidAmerican will buy all outstanding shares of NV Energy's common stock for $23.75 each share in cash.
The deal, which has been unanimously approved by the boards of directors of both the companies, includes about $4.7bn in assumed debt and has an enterprise value of approximately $10bn.
The acquisition is expected to close in the first quarter of 2014, following approvals by NV Energy's shareholders, and state and federal authorities.
Greg Abel, chairman, president and CEO of MidAmerican Energy Holdings Company, said that 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.
"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," Abel added.
Michael Yackira, president and CEO of NV Energy, noted: “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."
NV Energy will operate as a subsidiary of MidAmerican Energy Holdings Company but will retain its current name and headquarters in Las Vegas.
Following the completion of the deal, MidAmerican Energy Holdings Company will have assets of approximately $66bn and its regulated electric and gas utilities will serve 8.4 million customers.