Blog Post

Insight: Berkshire Hathaway Ends a Deal Drought During the Pandemic

By: Thomas Holst

Note: The opinions expressed are those of the author alone and do not reflect an institutional position of the Gardner Institute. We hope the opinions shared contribute to the marketplace of ideas and help people as they formulate their own INFORMED DECISIONS™.

Warren Buffet’s Berkshire Hathaway acquired Dominion Energy’s interstate natural gas transmission and storage assets in a $10 billion deal featuring two active players in Utah’s energy market. First, Berkshire Hathaway Energy’s PacifiCorp utility provides electricity to 915,000 customers in Utah. Second, Dominion Energy provides natural gas to 1 million customers in Utah, Wyoming, and Idaho.

For Berkshire Hathaway, the $10 billion asset acquisition in early July was its largest since 2016.

Does the deal affect Dominion Energy’s local utility operations? No. Dominion Energy will continue to use its local distribution network to supply natural gas to customers in the Intermountain West.

How did the investment community react to the Berkshire-Dominion deal? In the month following the deal announcement, Dominion Energy share prices rose 9.5%, Berkshire Hathaway B shares 12%.

Dominion Energy, a Virginia-based company, will focus on its utility business that provides energy to 7 million customers in 20 states. To illustrate this point, over 90% of future Dominion operating earnings will come from its utility business. In becoming a pure play utility company regulated by state public utility commissions, Dominion provides steady income to investors.<