Berkshire Hathaway buys AltaLink from SNC-Lavalin for $3.2B
Alberta's largest regulated electricity transmission company sold to subsidiary of Warren Buffett's firm
MONTREAL—SNC-Lavalin Inc. announced this week it is selling AltaLink, LP, Alberta’s largest regulated electricity transmission company, to a subsidiary of the holding company run by Warren Buffett for gross proceeds of $3.2-billion.
The deal with Berkshire Hathaway Energy, owned by Bershire Hathaway Inc., is expected to close Dec. 31 and represents what the Montreal-based engineering giant says is “another significant step” in its strategic plan to unlock and create value from its portfolio of infrastructure concession investments.
AltaLink owns more than half of Alberta’s transmission grid, some 12,000 kilometres of transmission lines, as well as 280 substations, delivering electricity to about 85 per cent of the province’s population.
“After a robust process that drew considerable interest, we are very pleased to announce a transaction that recognizes significant value for AltaLink—a unique regulated asset in a high-growth electricity market—while also providing for a continued relationship with SNC-Lavalin,” president and CEO Robert Card said in a statement announcing the deal after markets closed.
“I would like to thank AltaLink’s employees, who have helped make their company so successful. I know they will have a bright future and benefit from enhanced career opportunities as part of Berkshire Hathaway Energy.”
Card said the sale will help the company concentrate on growth for its engineering and construction divisions.
Completion of the sale is subject to customary regulatory approvals, including approval by the Alberta Utilities Commission (AUC) and approvals pursuant to the Competition Act and Investment Canada Act, which requires that deals of this size involving foreign buyers are of net benefit to Canada.
Meanwhile, SNC and MidAmerican Transmission, a subsidiary of Berkshire Hathaway Energy, have also mutually agreed to develop engineering, procurement and construction (EPC) opportunities in the United States and Canada.
“The agreement combines the engineering and construction management strengths of SNC-Lavalin with the strong track record of MidAmerican Transmission on joint transmission projects with other entities,” SNC said.
Based in Des Moines, Iowa, Berkshire Hathaway Energy, with assets of some US$70-billion, owns and operates some 284,000 kilometres of transmission and distribution lines.
Its subsidiary, MidAmerican Transmission, owns transmission lines throughout the U.S. and Canada.
SNC-Lavalin is one of the leading engineering and construction groups in the world and is a major player in the ownership of infrastructure and in the provision of operations and maintenance services.