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Buffett's Berkshire Buys AltaLink for $2.9B Ahead of Earnings

NEW YORK (TheStreet) -- Berkshire Hathaway Energy, the energy division of Berkshire Hathaway (BRK.A), said on Thursday evening it has agreed to buy Canadian utility AltaLink for $2.9 billion and signed a deal with the company's former parent, SNC-Lavalin Group, to invest in transmission projects in North America.

The deal comes just ahead of Berkshire Hathaway's first-quarter earnings report and its annual shareholder meeting in Omaha, Neb.

Berkshire Energy's acquisition of AltaLink appears to be an investment in two major themes that have benefited the Warren Buffett-run company in the years since the financial crisis: A bet on the stable returns of power generation and increasing investment in regions exposed to the boom in North American oil and gas drilling.

The latter will likely be a big factor in Berkshire Hathaway's expected first-quarter earnings, due after the market close on Friday. Berkshire has seen its earnings rise in recent years as investments like a takeover of BNSF Railways was positively impacted by a surge in shale oil and gas rail volumes.

>>Read More: Berkshire Hathaway's B-Share Generation 

AltaLink is a regulated transmission-only business, headquartered in Calgary, that serves serve 3 million Albertans, or about 85% of the province's population. Alberta is one of Canada's biggest oil regions as a result of shale and oil sands drilling projects.

"The acquisition of AltaLink represents a great long-term opportunity to invest in Alberta's critical transmission infrastructure and in Canada," Greg Abel, CEO of Berkshire Hahaway Energy, said in a statement.

"We see this as a great addition to the Berkshire Hathaway Energy family, and we look forward to having AltaLink continue to support the economic growth and evolving energy needs of Alberta," he added.

A partnership between MidAmerican Transmission, a division of Berkshire-owned utility MidAmerican Energy, and AltaLink's former parent SNC-Lavalin Group will also work to develop transmission projects in both Canada and the U.S.

Berkshire Earnings

After the bell, Berkshire will report first-quarter earnings. The company is expected to earn $47.6 billion in revenue and net income of $2.2 billion, according to analyst estimates compiled by Bloomberg.

In the fourth quarter, Berkshire Hathaway reported operating earnings of $3.7 billion for the fourth quarter of 2013, a 34% increase from year-ago levels.

When counting investment and derivative gains of $1.2 billion for the fourth quarter, Berkshire Hathaway reported net income of just under $5 billion for the fourth quarter, a new record.

>>Read More: Berkshire's Renewable Energy Investment to Hit $15 Billion

>>Read More: Berkshire Hathaway's Next Elephant Acquisition

>>Read More: Berkshire's Bet on the Greening of Nevada

>> Read More: Berkshire's Elephant Guns to Hit Utilities Deals

-- Written by Antoine Gara in New York.

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