Breaking Finance News

Berkshire buying NV Energy

The Associated Press is reporting that MidAmerican Energy, a subsidiary of Berkshire Hathaway (NYSE: BRK-B)(NNYSE: BRK-A) is purchasing NV Energy (NYSE: NVE) for $5.6 billion or $23.75 per share–a 23 percent premium over NV’s closing price on Wednesday.

NV Energy provides gas and electric services to about 1.3 million customers in Las Vegas, North Las Vegas, and surrounding areas. The company has the capacity to generate 6,078 megawatts through 61 generating units.

Why the merger? Sources say that combining NV’s solar and wind resources with MidAmerican’s expertise in renewable energy is in the strategic best interest of both companies.

Like most acquisitions, some shareholders already feel short-changed. In a press release made public within an hour of the announcement, Bernstein Liebhard LLC announced that it was investigating whether the Board of Directors of NV Energy breached its fiduciary duty to its shareholders by entering into the deal with MidAmerican.

In the release, the company said that the investigation was focused on “the potential unfairness of the price to NV Energy shareholders and the process by which the NV Energy Board of Directors considered and approved the transaction.”

Reuters reported that Warren Buffett said, “This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada’s economy,”

Once the deal is complete, MidAmerican Energy will have assets of $66 billion and will service 8.4 million customers.



Disclosure: At the time of this writing, Tim Parker had no position in the equities mentioned.


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