Berkshire Adds to Natural Gas Portfolio

Warren Buffett has decided to spend some of his company's $137 billion cash pile in a $9.7 billion deal to acquire Dominion Energy's natural gas transmission and storage business. Berkshire Hathaway Energy is going to pay about $4 billion in cash and take on $5.7 billion of Dominion's existing debt.

This is going to be a bolt-on acquisition as it will add 12 400km of pipelines and 900 billion cubic feet of storage to Berkshire's existing infrastructure. Buying a natural gas pipeline and storage facilities right now is a contrarian move considering the fact that natural gas futures are at a 25-year low, meaning these assets are being bought at a discount.

This deal also signals that Buffett may be open to do more deals in the near future as the Covid catalysed consolidations begin. This deal is the largest deal that Berkshire has done since 2016 when it acquired Precision Castparts for $37.2 billion.