CalEnergy to Buy MidAmerican Electric-Gas Utility for $4 Billion
CHICAGO — CalEnergy Co. said Wednesday that it agreed to buy electric and natural gas company MidAmerican Energy Holdings Co., marking the first acquisition of a utility by an independent power producer in the United States.
The $4-billion cash deal, which analysts said was also the first purchase of a utility by a nonregulated company, positions Omaha-based CalEnergy for deregulation in U.S. and other energy markets.
“We have created a formidable competitor in the deregulating energy markets of the U.S. and beyond,” CalEnergy Chairman and Chief Executive David Sokol said in a statement.
The deal, in which power supplier CalEnergy will pay $27.15 a share for Des Moines-based MidAmerican, includes $1.4 billion of MidAmerican debt and preferred stock.
CalEnergy said the new company would have total annual revenue of about $5 billion and assets of $11.8 billion, and would serve more than 3.3 million retail customers.
The announcement electrified MidAmerican’s stock, which jumped $5.25 to close at $25.25 on the New York Stock Exchange, where it was the second-biggest percentage gainer. CalEnergy rose $1.56 to $28, also on the NYSE.
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