Buys Dominion Energy Natural Gas –

Warren Buffett

Warren Buffett’s Berkshire Hathaway is finally pulling the trigger. The conglomerate is spending $4 billion to buy the natural gas transmission and storage assets of Dominion Energy.

Including the assumption of debt, the deal totals almost $10 billion. It’s Berkshire’s first major purchase since the coronavirus pandemic and subsequent market collapse in March.

At his annual shareholder meeting in May, Buffett revealed that Berkshire had built up a record $137 billion cash hoard as financial markets tanked and that he hadn’t seen many favorable deals, despite the stock market’s swoon.

Warren Buffett and Federal Reserve

“We have not done anything because we don’t see anything that attractive to do,” Buffett said at the time, suggesting that the quick actions taken by the Federal Reserve this year meant companies could get more access to financing in the public markets than they could during the financial crisis in 2008 and 2009.

“If we really liked what we were seeing, we would do it, and that will happen someday,” Buffett said in May.

For Dominion, the move is part of its transition to a pure-play regulated utility company that focuses on clean energy production from wind, solar, and natural gas.

Following the sale, Dominion expects that 90% of its future operating earnings will come from its utility companies that provide energy to more than 7 million customers in states like Virginia, North and South Carolina, Ohio, and Utah.

Warren Buffett Cancels Atlantic Coast Pipeline

Dominion also announced that it is canceling its Atlantic Coast Pipeline project with Duke Energy.

The $8 billion projects have faced increasing regulatory scrutiny and delays that have ballooned projected costs and raised doubts about its economic feasibility.

Under the deal, Berkshire Hathaway Energy will acquire 100% of Dominion Energy Transmission, Questar Pipeline, and Carolina Gas Transmission and 50% of the Iroquois Gas Transmission System.

Berkshire will also acquire 25% of Cove Point LNG, an export-import and storage facility for liquefied natural gas, one of just six in the U.S.

Berkshire Energy

Berkshire Energy will pay $4 billion in cash for the assets, and assume $5.7 billion in debt. Dominion plans to use about $3 billion of the after-tax proceeds to buy back its shares later this year.

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The deal is subject to regulatory approval and is expected to close in the fourth quarter.