By Jonathan Stempel
(Reuters) -Berkshire Hathaway will take full ownership of Berkshire Hathaway (NYSE:) Energy, after Warren Buffett’s conglomerate agreed to buy the 8% it did not already own from the family of the late billionaire philanthropist Walter Scott.
Berkshire Hathaway Energy will pay $2.37 billion in cash for about 4.42 million of its shares, according to a filing with regulators on Tuesday.
The Scott family will also exchange 1.6 million shares of the energy unit for an unspecified number of Berkshire Class B shares. Berkshire Hathaway Energy is also exchanging some debt.
Following the transaction, Omaha, Nebraska-based Berkshire will own 100% of the energy unit, up from 92% now.
The transaction is expected to close in the current quarter following regulatory approval. Its total value is unclear because the energy unit’s shares are not publicly traded.
Berkshire Hathaway Energy declined further comment, while Berkshire did not immediately respond to a request for comment.
A native of Omaha, Scott was a longtime Berkshire executive and friend of Buffett, who died in September 2021 at the age of 90.
Analysts had expected Berkshire to buy out Scott’s family, although Edward Jones analyst James Shanahan said that took longer than expected.
In June 2022, Berkshire Vice Chairman Greg Abel, who led Berkshire Hathaway Energy for a decade, sold his 1% stake to Berkshire for $870 million. That suggested the Scott family’s stake was worth nearly $7 billion at the time.
But the energy unit’s PacifiCorp company has since faced many lawsuits from homeowners and business owners who blame it for causing wildfires in Oregon and Northern California in 2020.
The purchase also allows Berkshire to spend some of its cash, which totaled $276.9 billion as of June 30.
“It makes sense,” said Cathy Seifert, an analyst at CFRA Research. “Berkshire has a significant amount of money to deploy at a time when U.S. Treasury yields are falling and will likely continue to fall.”
She said the energy unit has nevertheless “had its fair share of challenges since Abel sold its stake, not least the wildfires.”
Berkshire Hathaway Energy owns energy, utility and pipeline companies and is one of the largest U.S. residential real estate brokers.
Buffett’s conglomerate originally bought a 76% stake in 2000, when the unit was known as MidAmerican Energy. The unit adopted the name Berkshire Hathaway Energy in 2014.
Berkshire also owns dozens of other companies, including BNSF railroad and Geico auto insurance, and common stocks, including Apple (NASDAQ:).
The 62-year-old Abel is expected to eventually succeed the 94-year-old Buffett as CEO of Berkshire.
