Berkshire goes all in in the energy market

Berkshire goes all in in the energy market

The pandemic effects are starting to wear off for Berkshire

After the pandemic put a pause on mergers and acquisitions, every major company began to work on expanding and secure a spot in its field: Lululemon bought Mirror, Uber bought Postmates, and now, Berkshire Hathaway purchased Dominion Energy natural gas assets, in a $10 billion deal.

After the deal closed, it became the most significant purchase that Berkshire made since its March collapse. For Dominion, this one is the move that helps its transition from a business focused on the gas transmission to a clean energy utility company. At the moment, Dominion is among the most important producers and transporters of energy in the States, and it provides either electricity or natural gas to more than 7 million customers.

Moreover, the Virginia-based company is looking to invest roughly $55 billion over the next 15 years in emission reduction technologies, including zero-carbon generation, renewable natural gas, and gas distribution line replacement, and energy storage.

Moreover, on Sunday, Dominion Energy and Duke Energy terminated their collaboration – Atlantic Coast Pipeline – a natural gas pipeline that should have gone across West Virginia, Virginia, and North Carolina. Environmental groups scrutinized the project, and the ongoing delays, litigation, and an increase in costs didn't do the project any favours.

For Berkshire, the purchase increased its interstate natural transmission to 18% from what it originally had – 8%. The deal also brings 7,700 miles of transmission pipelines and natural gas storage, and 900 billion cubic feet of gas storage. Moreover, it will have a 50% operating interest in the Iroquois Gas Transmission System and a 25% operating interest in one of the liquid natural gas shipping facilities at Cove Point.

The deal in currently under regulatory approval, but if everything goes according to the schedule, it will be closed in the last quarter of this year.

Dominion Energy carries on with its gains. After Friday at the close it was higher by 0.41%; in today's pre-market, it rallied 0.37%. Unlike Dominion, Duke closed the Friday session lower by 0.11%, and today it lost more than 1%.

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Sources: cnbc.com, finance.yahoo.com, edition.cnn.com


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