A Berkshire Hathaway unit has committed to purchase NV Energy Inc., as part of a deal that values the utility company based out of Nevada at $5.59 billion.
The current deal in progress has an enterprise value worth about $10 billion, said each company. Representatives from both companies did not have anyone immediately available to answer any questions or comment on the things included in the enterprise value.
Berkshire Hathaway subsidiary MidAmerican Energy Holdings Company will acquire NV Energy for a total of $23.75 per share. This is a premium value of about 23% to the closing price that NV Energy reached on Wednesday.
This transaction is still subject to federal and state approval, as well as other conditions, and is expected to take place during the first quarter of 2014.
“Part of what attracted MidAmerican to NV Energy is its solid commitment to the state of Nevada” and the way that it performs as a high quality energy company, we learned from Greg Abel, MidAmerican Energy chief executive officer. It also added that his company is very impressed with the direction strategically put in place by Michael Yackira, NV Energy chief executive officer.
Mr. Abel tells us that MidAmerican will be able to bring expertise, stability and competitively priced capital into the fold at NV Energy.
The new acquisition is going to continue to operate under its current name, and it will work as a separate corporate subsidiary of MidAmerican. They will also continue to be based out of Las Vegas.
Once the deal is complete, MidAmerican Energy will have currently have assets in and around the amount of $66 billion. Its regulated utilities will serve about 8.4 million people.
The Sierra Pacific and Nevada Power units of NV Energy have recently cut expenses, and really lowered their fuel purchases, in an effort to counterbalance the lower revenue that they have been experiencing. The company was able to raise first-quarter earnings by 76%. It did so by reducing expenses sharply.
In after-hours trading, shares of NV Energy rose by 23% to reach $23.75 per share.