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Buffett's Berkshire to buy Dominion Energy gas assets for $4 billion

Stock Markets Jul 05, 2020 05:35PM ET
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© Reuters. Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha
 
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By Jonathan Stempel

(Reuters) - Berkshire Hathaway Inc (N:BRKa) said its energy unit will buy Dominion Energy Inc's (N:D) natural gas transmission and storage network for $4 billion, helping billionaire Chairman Warren Buffett reduce his conglomerate's cash pile while letting Dominion focus on utilities operations.

The transaction announced on Sunday includes more than 7,700 miles (12,390 km) of natural gas transmission lines and 900 billion cubic feet of gas storage.

Berkshire Hathaway Energy is buying 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 (TO:BAMa) owns 25%.

The Berkshire unit will also assume $5.7 billion of debt, giving the transaction a $9.7 billion enterprise value. It expects a fourth-quarter closing, pending regulatory approvals.

"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 statement.

Dominion expects up to 90% of future operating earnings to come from utilities.

The company and Duke Energy Inc (N:DUK) separately announced on Sunday they would abandon their $8 billion Atlantic Coast Pipeline, running under the Appalachian Trail and through West Virginia, Virginia and North Carolina.

Dominion and Duke cited delays and uncertain costs, despite a favorable U.S. Supreme Court decision last month.

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 of operating profit in 2019. Its chairman, Greg Abel, is also a Berkshire vice chairman.

Berkshire ended March with $137.2 billion of cash, reflecting Buffett's four-year inability to find major acquisitions, even as the coronavirus pandemic took hold and stock prices plunged.

Berkshire Hathaway Energy declined additional comment.

Buffett's Berkshire to buy Dominion Energy gas assets for $4 billion
 

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Comments (5)
Desi Pardes Wich
Desi Pardes Wich Jul 05, 2020 6:24PM ET
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I read that buffet bought it for 9.5 or 10 billion dollars please check google
Muhamed Jaffir
Muhamed Jaffir Jul 05, 2020 6:24PM ET
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Did you read? He bought it for 4 assumed 5.7 in debt making the total 9.7.
Plopseven Schwartz
Plopseven Schwartz Jul 05, 2020 6:05PM ET
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Gas is a failing asset. Homeless people and people on lockdown don’t use gas. Until the virus is under control, gas will hemmorage money at incredible rates. Have you read about BP’s missing $4 billion loan?
Kaveh Sun
Kaveh Sun Jul 05, 2020 6:05PM ET
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This is nat gas. It is not the same.
Kaveh Sun
Kaveh Sun Jul 05, 2020 6:05PM ET
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I bet U didnt read pass the subject to post a political statement.
Kaveh Sun
Kaveh Sun Jul 05, 2020 6:03PM ET
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Good buy. Nat gas is at lowest price. I dont think it will go lower.
Alan Kaid
umadbro Jul 05, 2020 6:03PM ET
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Buffett is buying assets of natural gas... not contracts or physical natural gas.
Kaveh Sun
Kaveh Sun Jul 05, 2020 6:03PM ET
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Alan Kaid when nat gas is low, everything nat gas related(storage,tansport) go low. When nat gas moves up, everything goes up.
Stak Hard
Stak Hard Jul 05, 2020 6:03PM ET
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Don’t bother Mr Sun There are many people that don’t have a clue. In 2 years NG will be trading double from hete
Luca Toscani
Luca Toscani Jul 05, 2020 5:55PM ET
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buy Bitcoin instead. look at your "rat poison". it will rule the world while you lost 50 billion dollars selling airline stocks at a loss
Jonathan Sutton
Jonathan Sutton Jul 05, 2020 5:55PM ET
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Wut?
Kelly Mayer
Kelly Mayer Jul 05, 2020 5:55PM ET
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Bitcoin is a "currency" backed by... hmmm... let's see... hmmm... ... ... nothing. Literally nothing. Has no physical use like gold or silver which have value on their own - they are used in countless trades such as jewerly, fashion, art, tech etc.. Bitcoin and crypto in general are bound to drop to their true worth which is zero.
GOAT Master
GOAT Master Jul 05, 2020 5:55PM ET
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So just like dolar?
Luca Toscani
Luca Toscani Jul 05, 2020 5:55PM ET
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Kelly Mayer  Bitcoin has a lot of value, its the most secure money. when you buy Bitcoin you buy the scarcest asset, you know the quantity of electricity that you need to mine a bitcoin?scarce, divisible, fungible, unseizable, it's like owning a piece of the world wealth on the most secure ledger. open your eyes.
Vv Pp
Vv Pp Jul 05, 2020 5:55PM ET
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best comment GOAT
New Jazenevd
New Jazenevd Jul 05, 2020 5:45PM ET
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That,'s what Buffett does the best: buying good businesses cheap. General media often calls him the greatest stock investor and it is wrong. His forte is in private equity business, not in stocks.
 
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