China News Agency, Houston, July 5 (Berkshire Hathaway, a subsidiary of well-known US investor Warren Buffett, announced on the 5th that it will acquire the natural gas business assets of Dominion Energy, The transaction value is close to US$10 billion.
US Consumer News and Business Channel News, this is the first large-scale merger and acquisition transaction that Buffett, the chairman of the Berkshire-Hathaway board of directors, has undertaken since the outbreak of the new coronary pneumonia epidemic in the United States in mid-March. On the 5th, Buffett wrote in a statement, "We are very proud to add such a huge natural gas asset portfolio to our already strong energy business."
Data map: Buffett. Image source: CFP Vision China
According to the M&A agreement, Berkshire-Hathaway will acquire the natural gas business assets of Dominion Energy, a US natural gas transportation company, for $4 billion in cash, and will assume its $5.7 billion in liabilities. The transaction value reached 9.7 billion US dollars.
The transaction is awaiting approval from US regulators and is expected to be completed in the fourth quarter of this year.
"New York Times" said that in May this year, at Berkshire-Hathaway's annual shareholder meeting, Buffett said that Berkshire-Hathaway had accumulated 137 billion US dollars in cash. However, due to the severe downturn in the stock market, no attractive investment opportunities were seen. The media said that in fact, Buffett has been unable to find a major acquisition target in the past four years.
Pursuant to the M&A agreement, Berkshire-Hathaway’s natural gas asset portfolio will include 100% equity of Dawney Energy Transportation Company, Questar Pipeline Company (Questar), Carolina Gas Transportation Company, and Iroquois Natural Gas Transportation Company. (Iroquois) 50% equity, Cove Point LNG (Cove Point LNG) 25% equity. Bay Point LNG has one of only six LNG export terminals in the United States.
After the transaction is completed, Berkshire Hathaway will greatly increase its influence in the natural gas industry. The company will undertake 18% of the interstate natural gas transmission in the United States, currently 8%.
For Dominion Energy, the company is planning to transform from natural gas transportation business to develop clean energy business such as wind energy and solar energy. The company plans to use $3 billion in cash to repurchase shares after the transaction is completed.
It is worth mentioning that Dominion Energy announced on the 5th that it will abandon the oil pipeline along the Atlantic along with Duke Energy (Duke Energy). At present, the total cost of the project is about 8 billion US dollars.
According to another report in the Wall Street Journal, the pipeline is planned to be laid under the Appalachian Mountains, passing through West Virginia, Virginia and North Carolina. The project was announced in 2014, but it has been delayed due to criticism from environmentalists. (Finish)