MidAmerican Energy to buy Constellation in 4.7 bln dlr deal

Posted 09 19 2008 8:55AM

NEW YORK (AFP) - MidAmerican Energy Holdings Company, a subsidiary of Warren Buffett's Berkshire Hathaway, agreed Thursday to acquire Constellation Energy for around 4.7 billion dollars in cash.

The companies said in a joint statement that MidAmerican agreed to purchase all outstanding shares of Constellation Energy for 26.50 dollars per share.

MidAmerican shares which lost about 58 percent of their value this week, leapt 1.94 percent to 25.25 dollars on the news.

The transaction was unanimously approved by both boards of directors and is expected to close within nine months.

"MidAmerican has been a wonderful steward of its energy assets and the acquisition of Constellation Energy, when completed, will prove beneficial to all constituents," said Buffett, chairman of Berkshire Hathaway and one of the world's richest individuals based on a ranking by Forbes magazine.

"We strongly believe this transaction is in the best long-term interest of our investors, employees and the customers and communities we serve," said Mayo Shattuck, chairman, president and chief executive of Constellation Energy.

MidAmerican produces energy from fuel sources including geothermal, natural gas, hydroelectric, nuclear, coal and wind. The Des Moines, Iowa-based company also supplies energy in the US and British consumer markets, with 6.7 million electricity and gas customers.

Constellation supplies electricity nationwide from diversified fuel types, including nuclear, coal, gas and renewable sources.

The Baltimore, Maryland-based company teamed up with French energy giant EDF in July 2007 UniStar Nuclear Energy, to operate new nuclear power plants in the United States.

EDF, which increased its stake in Constellation to 9.51 percent last week, reacted to the takeover announcement Thursday by saying the timing had not been right to further raise its stake.

The company, "which studied the possibility of strengthening its capital position in Constellation Energy, decided at this stage that the overall conditions were not there to do it," EDF said.

Gregory Abel, MidAmerican president and CEO, highlighted Constellation's "premier fleet of nuclear assets."

Its joint venture with EDF "complements MidAmerican's ongoing commitment to environmental initiatives, including investments in hydro, wind and geothermal energy," Abel said.

"Joining forces with Constellation Energy accelerates our strategic initiative to develop and build energy infrastructure assets in North America."