Berkshire Hathaway utility MidAmerican Energy provides electricity and natural gas services to consumers across the middle of the U.S. and along the West Coast. Yet one state it has not served up until now has been Nevada, and it plugged that hole with the announcement yesterday that it is purchasing NV Energy , a holding company whose subsidiaries do business as Nevada Power Company and Sierra Pacific Power Company.
MidAmerican will purchase all outstanding shares of NV Energy for $23.75 per share in cash, a 23% premium to its closing price on May 29. As of this writing, shares are trading at $23.58.
The transaction, which has been unanimously approved by both companies' boards of directors, sets an enterprise value for NV at approximately $10 billion. Because the deal is subject to customary closing conditions, including approval by NV Energy's shareholders as well as the OK from federal and state regulators, the transaction is not expected to close before the first quarter of 2014.
Berkshire Chairman Warren Buffett was quoted as saying: "This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada's economy. Through MidAmerican, we have found in NV Energy a great company with similar values, outstanding assets, and a superb management team."
As is usual with a Buffett acquisition, management will continue in place at the utility and NV Energy will operate as a separate corporate subsidiary of MidAmerican Energy under its current name and will continue to be headquartered in Las Vegas.
When completed, MidAmerican Energy will have assets of approximately $66 billion and its regulated electric and gas utilities will serve 8.4 million customers.
Lazard Ltd. served as financial advisor to NV Energy in the deal while Sidley Austin LLP, Hogan Lovells, and Reno, Nev.-based Woodburn and Wedge served as legal advisors.
The article Berkshire's MidAmerican Energy to Buy NV Energy originally appeared on Fool.com.
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