"The energy sector has long interested us, and this is the right fit," Buffett said.

Berkshire Hathaway, through its Iowa-based MidAmerican Energy Holdings Co. subsidiary, will purchase Portland, Ore.-based PacifiCorp from ScottishPower PLC, which acquired the utility in 1999. In addition to the cash payment, MidAmerican will assume $4.3 billion in PacificCorp debt and preferred stock.

ScottishPower's decision also was based on PacificCorp.'s capital needs, PacifiCorp CEO Judi Johansen said at a news conference in Salt Lake City. The utility reportedly needs about $5 billion over the next five years to meet the growth demands on infrastructure, distribution and distribution.

The transaction, the third major acquisition in the U.S. energy industry in the past year, is expected to close in 2006. "It's going to be one of the bigger energy companies in the country," said Tim Winter, an analyst at A.G. Edwards & Sons.

Berkshire Hathaway's Class A shares rose $2,010, or 2.4 percent, to $85,500 yesterday on the New York Stock Exchange.

MidAmerican, based in Des Moines, Iowa, said the deal will create an energy holding company serving approximately 3 million electric and natural gas customers in 10 states and would have 6.6 million customers worldwide.

PacifiCorp will continue to be based in Portland and will retain its name. It also will continue operating as Pacific Power in Oregon, Wyoming, Washington state and northern California, and as Utah Power in Utah and Idaho.

The combined MidAmerican-PacifiCorp will have assets of more than $32 billion, including $25.3 billion in the United States. MidAmerican will have approximately $10 billion in annual revenues internationally, including $8.5 billion from the United States, the company said.