By Ben Walsh
Warren Buffett speaks onstage during Fortune's Most Powerful Women Summit—Day 2 at the Mandarin Oriental Hotel on October 13, 2015 in Washington, DC. Photo by Paul Morigi/Getty Images for Fortune/Time Inc
Warren Buffett’s Berkshire Hathaway is buying Dominion Energy’s natural gas storage and transmission assets in a deal worth a total of $9.7 billion, the company said in a release Sunday.
Once the deal closes in the fourth quarter of 2020, Berkshire Hathaway’s (ticker: BRK.A) energy subsidiary will gain ownership of 7,700 miles of natural gas pipelines, vast storage facilities, and a 25% stake in a liquefied natural gas export, import, and storage site in Maryland.
“We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business,” Berkshire chairman Buffett said in a statement. “This premier natural gas transmission and storage business has been operated and managed in a best-in-class manner,” Berkshire Hathaway Energy’s president and CEO Bill Fehman said.
Buffett is usually a bargain hunter during significant market downturns, placing big bets on Goldman Sachs (GS) and General Electric (GE) during the financial crisis when both firms welcomed an injection of cash and a mark of confidence during a time when both were scarce. But until this purchase, Buffett hasn’t made similarly large acquisitions during the coronavirus pandemic.
In part, that is because the U.S. Federal Reserve and Congress have acted relatively swiftly and on a grand scale to provide monetary and fiscal support to American businesses, cutting down on the number of distressed companies that need Buffett’s capital and are willing to do so on his sometimes steep terms.
Berkshire has sold off some assets in the downturn, most notably its entire stake in airline stocks, including American Airlines (AAL), Delta (DAL), Southwest (LUV), and United (UAL). Berkshire posted a net loss of nearly $50 million in the first three months of 2020.
Berkshire class A stock is down 21.2% year-to-date, Dominion (D) stock is down 0.2%, while the S&P is now off by just 3.1% and the Dow is still 24% below where it started the year.
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