Please ensure Javascript is enabled for purposes of website accessibility

Buffett's Berkshire Hathaway Announces Partial Closing of Dominion Energy Deal

By Howard Smith – Nov 2, 2020 at 12:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The $9.7 billion purchase of Dominion Energy's transmission and storage business has been split into two phases.

Berkshire Hathaway Energy, a subsidiary of Warren Buffett's conglomerate, Berkshire Hathaway (BRK.A 0.01%) (BRK.B -0.57%), today announced it has closed on the first phase of its previously announced deal with Dominion Energy (D -0.21%). The $8 billion purchase consisted of approximately $2.7 billion in cash and the assumption of $5.3 billion in debt. 

The energy subsidiary also said it completed a coinciding issuance of $1.2 billion in senior notes with the proceeds going to pay down Dominion Energy debt as it matures in future months. The closing transaction does not yet include Dominion's Questar Pipeline Group, which is expected to receive regulatory approval in early 2021.

A handshake with images of people superimposed and a city skyline in the background

Image source: Getty Images.

Berkshire and Dominion announced a $9.7 billion deal in July 2020. The second, and final, phase of the deal for the Questar Pipeline Group will be for another $1.3 billion in cash and the assumption of approximately $430 million in long-term debt. Questar operates 1,888 miles of natural gas pipeline and provides transportation and underground storage services in Utah, Wyoming, and Colorado.

Today's completed deal includes a 25% stake in Cove Point LNG -- an LNG export, import, and storage facility in Maryland that will now be operated by Berkshire Hathaway Energy. 

In a statement on today's closing, Greg Abel, Berkshire Hathaway's vice chairman, noninsurance operations, and Berkshire Hathaway Energy chairman, said, "With shared values and priorities, the business is a great fit within our organization and will play an important role in our long-term plan to deliver clean, low-cost and sustainable energy solutions to customers and communities."

Howard Smith owns shares of Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends Dominion Energy, Inc and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short December 2020 $210 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.