Berkshire Unit in $5.6 Billion Deal for Nevada’s Largest Electric Utility

The billionaire investor Warren Buffett dived back into the acquisition pool on Wednesday with a large bet in the energy sector. His Berkshire Hathaway‘s MidAmerican Energy Holdings agreed to buy Nevada’s largest electric utility, NV Energy, for about $5.6 billion.

Mid American is paying $23.75 a share for NV Energy, a 23 percent premium to the company’s closing price on Wednesday. The deal includes the assumption of about $4.5 billion in debt.

The purchase of NV Energy, a utility with about 1.3 million electric and natural gas customers in Nevada, is the largest-ever acquisition made by MidAmerican, which Mr. Buffett bought in 2000. Based in Des Moines, Iowa, MidAmerican serves 7.1 million residents across 10 states. In a statement, Mr. Buffett suggested that the purchase was in part a play on the economic recovery in Nevada, one of the states hit hardest by the housing crisis.

“This is a great fit for Berkshire Hathaway, and we are pleased to make a long-term investment in Nevada’s economy,” said Mr. Buffett. “Through MidAmerican, we have found in NV Energy a great company with similar values, outstanding assets, and a superb management team.”

MidAmerican’s acquisition is Mr. Buffett’s second big deal this year. In February, Berkshire teamed up with a Brazilian investment group on a $23.6 billion takeover of the ketchup maker H.J. Heinz. In his annual letter to shareholders published in March, Mr. Buffett lamented about his inability to buy a big company in 2012, even with a cash hoard that at the beginning of the year stood at about $42 billion.

“I pursued a couple of elephants, but came up empty-handed,” Mr. Buffett wrote. He added: “Charlie and I have against donned our safari outfits and resumed our search for elephants.”

Mr. Buffett has long said that he planned to use MidAmerican as a vehicle to make acquisitions in the power sector. The deal for NV Energy exceeds the company’s $5.1 billion acquisiton of PacifiCorp from Britain’s Scottish Power in 2005.

In his annual letter, Mr. Buffett lauded the performance of MidAmerican, which he said was one of Berkshire’s five most profitable non-insurance companies that together had aggregrate pre-tax earnings of more than $10 billion last year. He called its chief executive, Greg Abel, an “outstanding” leader.

MidAmerican’s previous chief executive, David Sokol, was a top lieutenant of Mr. Buffett whom was once consider the front-runner to become the next head of Berkshire. He resigned in 2011 after he was accused of violating the company’s insider trading policies.