Brian Gongol

Berkshire has treated MidAmerican differently than its other subsidiaries -- instead of shipping the profits back to Omaha, they reinvest them over and over within MidAmerican's own portfolio. This purchase fits the standards for a Warren-Buffett-friendly acquisition: Using a rough back-of-the-envelope estimate for how Buffett appears to have valued other recent purchases, NV Energy is intrinsically worth about $6 billion, and MidAmerican is paying $5.59 billion. If a company in a steady industry (like utilities) where retained earnings can be deployed to create even higher profits (as MidAmerican has done by building a mammoth portfolio of wind turbines), then getting a company for a decent discount to its intrinsic value makes plenty of sense.



