Buffett buys power plant for US$5bn

LONDON - Warren Buffett's Berkshire Hathaway is buying the Oregon-based utility PacifiCorp from Britain's Scottish Power for US$5.1 billion ($7.3 billion), and the billionaire signalled he wants to make more energy acquisitions.

The purchase by Berkshire's MidAmerican Energy Holdings Co unit is Buffett's largest since the acquisition of reinsurer General Re Corp in 1998. Buffett, one of the world's richest people, had previously lamented his inability to spend Berkshire's US$46.7 billion of cash. MidAmerican, based in Des Moines, Iowa, will gain power plants and add 1.6 million customers in six western US states, increasing its customer base to 6.6 million. It is also assuming US$4.3 billion in debt.

"Buffett is getting PacifiCorp at a good price," said Barry Abramson, a utility analyst at Gabelli Asset Management.

The purchase extends recent consolidation in the US utility sector as it recovers from Enron Corp's collapse.

Duke Energy Corp this month agreed to pay about US$9 billion for Cinergy Corp. In December, Exelon Corp agreed to pay US$13.2 billion for New Jersey's Public Service Enterprise Group.

 

- REUTERS