Scottish Power sells PacifiCorp to MidAmerican Energy

24 May 2005 – UK’s largest utility Scottish Power said Tuesday it has agreed to sell the American arm of its business, Pacificorp, to utility Mid-American Energy Holdings for $9.4bn.

The acquisition by Mid-American will create an energy holding company serving approximately 3 million electric and natural gas customers in ten contiguous US states and 6.6 million customers worldwide.

David L. Sokol, MidAmerican chairman and chief executive officer, said, “This acquisition advances our strategy of owning and operating a portfolio of high-quality energy businesses with a strong focus on customer satisfaction, employee commitment and efficiency.”

Warren Buffett, chairman of Berkshire Hathaway, said, “The energy sector has long interested us, and this is the right fit. We are excited to be making this long-term investment, through MidAmerican, in the premier energy company in the West. PacifiCorp is a great company with outstanding assets.”

The transaction, which has been approved unanimously by both companies’ boards of directors, will result in a company with assets totalling more than $32bn internationally, of which $25.3bn are in the United States.

Following the acquisition, MidAmerican will have approximately $10bn in annual revenues internationally, of which $8.5bn will be from the United States. It will own, operate and have under construction or in advanced development more than 16 GW of electric generation in the United States, relying on a diverse fuel mix of coal, geothermal, hydroelectric, natural gas, nuclear, biomass and wind power to meet customers’ needs.

Ian Russell, chief executive of ScottishPower, said, “MidAmerican is a good strategic fit for PacifiCorp. We strongly believe that this transaction is in the best interests of PacifiCorp’s customers and employees.”

PacifiCorp will operate under its current name and will continue to be headquartered in Portland. The company will continue operating as Pacific Power in Oregon, Wyoming, Washington and northern California, and as Utah Power in Utah and Idaho.

MidAmerican will purchase all of the outstanding shares of PacifiCorp common stock for approximately $5.1bn in cash plus approximately $4.3bn in net debt and preferred stock, which will remain at PacifiCorp. The acquisition is subject to customary conditions, including the approval of the transaction by the shareholders of ScottishPower and the receipt of required state and federal approvals. The transaction is expected to be completed in 2006.