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Berkshire Hathaway Energy repurchasing Scott family stake

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Berkshire stake in energy unit will rise to 100% from 92%

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Analysts expected buyout, but price lower than forecast

By Jonathan Stempel

Oct 1 (Reuters) - Berkshire Hathaway ( BRK/A ) will take

full ownership of Berkshire Hathaway Energy, after the unit of

Warren Buffett's conglomerate agreed to pay $2.37 billion for

the 8% stake owned by the family of late billionaire

philanthropist Walter Scott.

According to a Tuesday regulatory filing, Berkshire Hathaway

Energy will acquire 4.42 million shares of its voting common

stock and a $100 million bond maturing in 2057, in exchange for

the $2.37 billion in cash and a $600 million, one-year note.

Scott's family will also receive about 1.6 million Berkshire

Class B shares, worth about $737 million as of Monday's close.

Berkshire Hathaway Energy expects to complete the

transactions following regulatory approvals in the current

quarter.

It said Omaha, Nebraska-based Berkshire will thereafter own

100% of its voting common stock, up from 92% now.

Neither Berkshire Hathaway ( BRK/A ) nor Berkshire Hathaway Energy

immediately responded to requests for comment.

Scott, an Omaha native, was a longtime Berkshire director

and Buffett friend who died in Sept. 2021 at age 90.

Analysts long expected Berkshire to buy out his family's

stake, thought the purchase price is lower than some forecast.

In June 2022, Berkshire Vice Chairman Greg Abel, who led

Berkshire Hathaway Energy for a decade, sold his 1% stake to

Berkshire for $870 million.

But the energy unit's PacifiCorp utility has since faced many

lawsuits by homeowners and business owners who blame it for

causing wildfires in Oregon and northern California in 2020.

The purchase also lets Berkshire spend some of its cash,

which totaled $276.9 billion as of June 30.

"It makes sense," said Cathy Siefert, an analyst at CFRA

Research. "Berkshire has a significant pile of cash to deploy,

at a time U.S. Treasury yields are falling and likely to

continue to fall."

She said the energy business nonetheless "has had its fair

amount of challenges since Abel sold his stake, not the least of

which is the wildfire litigation."

Berkshire Hathaway Energy owns energy, utility and pipeline

operations, and one of the largest U.S. residential real estate

brokerages.

Buffett's conglomerate originally bought a 76% stake in 2000,

when the unit was known as MidAmerican Energy. The unit adopted

the Berkshire Hathaway Energy name in 2014.

Abel, 62, is expected to eventually succeed Buffett, 94, as

Berkshire's chief executive.

(Reporting by Jonathan Stempel in New York)