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Buffet's Berkshire buys NV Energy

Published: 15:39 30 May 2013 BST

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A Berkshire Hathaway (NYSE: BRK.B) subsidiary is buying NV Energy Inc. (NYSE: NVE) in a deal that puts a $10 billion enterprise value on the electric and natural gas holding company. 

The Des Moines, Iowa-based MidAmerican Energy Holdings is paying $23.75 per share for NV, a 23 per cent premium on Wednesday's closing price. NV's board of directors has already approved the transaction, which is expected to close in the first quarter of next year. 

NV, which serves approximately 1.3 million electric and natural gas customers in Nevada, will retain its headquarters in Las Vegas and operate as a subsidiary of MidAmerican. 

The deal boosts the value of MidAmerican's assets to approximately $66 billion and customer reach to 8.4 million people. MidAmerican's total assets were worth $52 billion as of the end of 2012.

If NV renegs on the sale, it will need to pay MidAmerican a $169.7 million break fee. 

The deal meets the acquisition criteria outlined in Berkshire's last annual report. Berkshire, chaired by legendary investor Warren Buffett, says it is mostly looking for friendly deals that fall into the $5-20 billion range. 

"This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada's economy," said Buffett in a statement. "Through MidAmerican, we have found in NV Energy a great company with similar values, outstanding assets, and a superb management team."

This acquistion comes nearly four months after Berkshire and 3G Capital paid $28 billion for H.J. Heinz Company (NYSE: HNZ). 

NV shares are soaring more than 22 per cent to $23.60, while Berkshire has risen about 1.5 per cent to $114.70 as of 10:25 am ET. 

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