Upon completion of the proposed acquisition, MidAmerican Energy will have assets of approximately $66 billion and its regulated electric and gas utilities will serve 8.4 million customers. The company may also become America's largest utility by customer accounts.
"We expect the rationale of the deal to be a combination of a desire to own a risk averse stream of cash flows, exposure to the US housing recovery, potential exposure to the California energy / renewable market," Kevin Cole, a Credit Suisse analyst noted in a report.
Wednesday's deal furthers Berkshire's commitment to MidAmerican Energy and keeps the company on track for as much as $100 billion in spending in the energy sector over the next 10-to-15 years. It also fits Berkshire's investment in a widespread U.S. economic recovery through investments with exposure to the housing market.
Berkshire's head Warren Buffet characterized NV Energy as a long-term bet on Nevada's recovering economy.
"This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada's economy," Buffett said in a statement, while praising NV Energy's management and assets.
In Berkshire's 2011 annual shareholder meeting, Buffett and lieutenant Charlie Munger indicated they would be investing heavily in MidAmerican and the overall U.S. energy sector in coming years, leading to some expectations of
"MidAmerican Energy may have an opportunity to deploy as much as $100 billion over the next 10 to 15 years at very reasonable rate," Munger said at the shareholder meeting.
In Berkshire's 2012 shareholder letter, Buffett highlighted that nearly 90% of the conglomerate's spending was done in the U.S.
Lazard was financial adviser to NV Energy and Sidley Austin LLP, Hogan Lovells and Reno-based Woodburn and Wedge acted as legal advisers.
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-- Written by Antoine Gara in New York