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Buffett buys PacifiCorp for $9.4 billion
Deal to create utility with 3 million customers in 10 states
MSNBC News, AP
May 24, 2005
SALT LAKE CITY - MidAmerican Energy Holdings, the largest utility in Iowa, is expanding into the West, acquiring a six-state power company for $5.1 billion in cash and $4.3 billion in debt and preferred stock.
MidAmerican agreed Monday to buy Glasgow-based ScottishPower PLC’s PacifiCorp unit, which serves 1.6 million customers. MidAmerican is controlled by Warren Buffett’s Berkshire Hathaway Inc.
“The energy sector has long interested us, and this is the right fit,” said Buffett. “We are excited to be making this long-term investment, through MidAmerican, in the premier energy company in the West. PacifiCorp is a great company with outstanding assets.”
MidAmerican said Tuesday that the acquisition will create an energy holding company serving approximately 3 million electric and natural gas customers in 10 states and 6.6 million customers worldwide.
In a statement, MidAmerican said it will purchase all outstanding shares of PacifiCorp common stock for approximately $5.1 billion in cash plus approximately $4.3 billion in net debt and preferred stock, which will remain at PacifiCorp.
The acquisition has been approved by the boards of both companies, but is subject to approval of ScottishPower shareholders and state and federal regulatory agencies. The transaction is expected to be completed in 2006.
PacifiCorp will continue to be based in Portland and will retain its name. It also will continue operating as Pacific Power in Oregon, Wyoming, Washington state and northern California, and as Utah Power in Utah and Idaho.
The transaction will result in a company with assets of more than $32 billion, including $25.3 billion are in the United States. MidAmerican will have approximately $10 billion in annual revenues internationally, including $8.5 billion from the United States, the company said.
MidAmerican Energy Holdings is based in Des Moines. Through its businesses CalEnergy, CE Electric UK, Kern River Gas Transmission, Northern Natural Gas and MidAmerican Energy Company, it provides electric and natural gas service to 5 million customers worldwide, it said.
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