The UK’s Scottish Power is to sell US utility group PacifiCorp to MidAmerican Energy Co, a unit of Warren Buffett’s Berkshire Hathaway group. The $9.4 billion transaction includes $4.4 billion debt and Scottish Power intends to return some $4.5 billion of the net proceeds to shareholders. Scottish Power will also take a £927 million ($1.7 billion) impairment charge as a result of the deal, which comes just six years after Scottish Power bought the utility company.
The transaction is expected to take as much as 18 months to close and still requires regulatory approvals, including those from federal and state authorities. In addition, the approval of Scottish Power shareholders is also required.
Commenting on the transaction Scottish Power chief executive Ian Russell reportedly said, “There was further value to be gained from PacifiCorp but the scale of the investment required for those returns meant our shareholders’ best interests would be served by selling it.” Buffett commented that, “the energy sector has long interested us, and this is the right fit. We are excited to be making this long-term investment, through MidAmerican, in the premier energy company in the west.”
Pacificorp generates and supplies power to 1.6 million consumers in the northwestern US.
