Berkshire Hathaway Inc. (NYSE:BRK.A) announced that it is buying Dominion Energy Inc’s (NYSE:D) natural gas transmission and storage network for $4 billion U.S.
The deal enables Berkshire Hathaway Chairman Warren Buffett to reduce his conglomerate’s enormous cash pile while letting Dominion Energy focus on its core utilities operation. The transaction includes more than 7,700 miles of natural gas transmission lines and 900 billion cubic feet of gas storage.
Berkshire Hathaway Energy will buy Dominion Energy Transmission, Questar Pipeline, Carolina Gas Transmission, 50% of the Iroquois Gas Transmission System, and 25% of the Cove Point liquefied natural gas facility in Maryland. Dominion will retain 50% of Cove Point. Brookfield Asset Management Inc. owns 25%.
The Berkshire unit will also assume $5.7 billion U.S. of debt, giving the transaction a $9.7 billion U.S. enterprise value. It expects a fourth-quarter closing, pending regulatory approvals. Dominion Energy said it expects up to 90% of future operating earnings to come from utilities.
"We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business," Buffett said in a written statement.
Berkshire controls 91.1% of Berkshire Hathaway Energy, which owns the MidAmerican Energy, NV Energy and PacifiCorp utilities, natural gas pipelines, wind power assets and electricity businesses in Britain and Canada. The unit accounted for 12% of Berkshire’s $23.97 billion U.S. of operating profit in 2019. Berkshire ended March with $137.2 billion U.S. of cash.
