MidAmerican Energy Holdings Company closed the deal with Scottish Power PLC to buy PacifiCorp for a cool $9.4 billion. The deal will tweak the power of 3 million electric and natural gas customers in 10 contiguous states and 6.6 million customers worldwide.
Warren Buffett, chairman of Berkshire Hathaway, said, “The energy sector has long interested us, and this is the right fit. 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.”
David L. Sokol, MidAmerican chairman and chief executive officer, said, “This acquisition advances our strategy of owning and operating a portfolio of high-quality energy businesses with a strong focus on customer satisfaction, employee commitment and efficiency.”
The transaction, which has been approved unanimously by both companies’ boards of directors, will result in a company with assets totaling more than $32 billion internationally, of which $25.3 billion are in the United States.
Following the acquisition, MidAmerican will have approximately $10 billion in annual revenues internationally, of which $8.5 billion will be from the United States. It will own, operate and have under construction or in advanced development more than 16,000 megawatts of electric generation in the United States, relying on a diverse fuel mix of coal, geothermal, hydroelectric, natural gas, nuclear, biomass and wind power to meet customers’ needs.
Ian Russell, chief executive of ScottishPower, said, “MidAmerican is a good strategic fit for PacifiCorp. We strongly believe that this transaction is in the best interests of PacifiCorp’s customers and employees.”
In a related story, Reuters reported Standard and Poor announced they would likely shift down PacifiCorp’s credit from it’s A minus rating which is quite high. They also suggested they would raise MidAmerican Energy Holding’s BBB minus credit rating which is quite low (one above junk bond) status. This shift is tied directly to the sweet deal worked out by the two companies.
John Stith is a staff writer for Murdok covering technology and business.