(BRK.A), (BRK.B)
Kansas’s biggest utility, Westar Energy Inc., is looking for a buyer and Berkshire Hathaway Energy is rumored to be among the companies interested in the acquisition.
With a market cap of roughly $7 billion, Westar is in the same price range as NV Energy, which Berkshire acquired in December 2013 for $5.6 billion.
If Berkshire Hathaway Energy proves to be interested, it will reportedly face competing bids from Ameren Corporation, as well as an investor consortium that includes Borealis Infrastructure Management Inc. and the Canada Pension Plan Investment Board.
Based in St. Louis, Missouri, Ameren Corporation was created December 31, 1997 by the merger of Missouri’s Union Electric Company and the neighboring Central Illinois Public Service Company.
As for Berkshire Hathaway Energy, it has already partnered with Westar Energy on Prairie Wind Transmission, LLC, a 108-mile, 345-kilovolt high-capacity electrical transmission line in south-central Kansas that was completed in 2014.
Westar Energy would be a natural fit for both Berkshire Hathaway Energy and for Ameren.
Berkshire Hathaway’s MidAmerican Energy Company currently serves customers in a 10,600 square miles area composed of Iowa, Illinois, South Dakota and Nebraska.
Ameren’s service area in neighboring Missouri also fits well with Westar Energy, which provides power for approximately 687,000 customers in much of east and east-central Kansas.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.