Billionaire investor Warren Buffett has agreed to buy US electricity firm PacifiCorp for $9.4 billion including debt from utility Scottish Power.
British-based Scottish Power said today that it was selling PacifiCorp to MidAmerican Energy, an Iowa-based unit of Buffett's Berkshire Hathaway.
Scottish Power, which announced the unit had missed its earnings target, said it would return around $4.5 billion of the deal proceeds to its shareholders.
MidAmerican, which already owns British utility CE Electric UK and had once been tipped as a potential bidder for Scottish Power, agreed to pay $5.1 billion in cash plus approximately $4.3 billion in net debt and preferred stock.
"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," Mr Buffett said in a statement.
Shares in Scottish Power, Britain's second-biggest electricity stock, rose as much as 8.5 per cent to an intraday high of 479-3/4 pence, its highest price since September 2001.
The utilities sector has always been an attractive one for predatory investors, as companies in the sector are profitable and have strong cash-flows.
Scottish Power bought PacifiCorp in 1999 for around $10 billion, and the British company said the sale would lead to an impairment charge of £927 million ($1.7 billion).