Dive Brief:
- Warren Buffett's MidAmerican Energy Holdings announced that it has changed its name to Berkshire Hathaway Energy.
- “Our new name reflects the benefits we gain from Berkshire Hathaway’s ownership, particularly our ability to reinvest in our businesses and take a long-term view of our customers’ needs,” said Greg Abel, CEO of the newly minted Berkshire Hathaway Energy. (Abel has been mooted as a possible replacement for Buffett when he steps down as CEO of Berkshire Hathaway.)
- Subsidiaries PacifiCorp in Oregon and NV Energy in Nevada will retain their names. PacifiCorp and NV Energy are the first utilities to sign up for Cal-ISO's new energy imbalance market.
Dive Insight:
While the re-naming may seem trivial to some, Buffett cares deeply about how consumers perceive his businesses. Although many utilities may suffer from a public image problem, this is not the case with Berkshire Hathaway Energy and its utilities. Touting a customer satisfaction poll taken last year, Buffett told investors that "95.3% of respondents [gave] us a 'very satisfied' vote and not a single customer [rated] us 'dissatisfied.'"
Analysts believe the rebranding will be good for Berkshire's energy business. “MidAmerican doesn’t mean much, either to its customers or potential acquisition candidates, so making it Berkshire Hathaway Energy makes total sense,” said Jeff Matthews, who has written books about Warren Buffett and Berkshire Hathaway. Andy Kilpatrick, author of another book on Buffett, agreed saying the "recognized brand name could be a door opener for bringing in business."
After acquiring PacifiCorp in 2006 and NV Energy in 2013, Buffett has already set his sights on another "major" acquisition. Alignment with the Berkshire brand could serve to make any potential M&A activity more attractive to potential targets.
MidAmerican reported $1.64 billion in profit on $12.74 billion in revenue last year. The company owns $70 billion in assets and has 8.4 million customers.
