Friday, July 30

Warren Buffett reversed plans to buy a $1.3 billion pipeline to avoid antitrust scrutiny — and its shows how the rich and powerful see Washington’s growing regulatory threat

  • Warren Buffett’s Berkshire Hathaway abandoned plans to buy a $1.3 billion natural gas pipeline.
  • Buffett’s energy company operates in states where the pipeline runs, which seller said the FTC could have used to block the deal.
  • The abandoned purchase signals that Buffett sees a growing federal regulatory threat.
  • See more stories on Insider’s business page.

Washington’s beefing up its antitrust regulatory muscle, and billionaire investor Warren Buffet is seemingly well aware of it.

The Berkshire Hathaway owner’s energy subsidiary said Monday it’s throwing out plans to buy a $1.3 billion natural gas pipeline that operates in 16 states, including Utah, Wyoming, and Colorado. Those are territories where his subsidiary’s energy company also runs, as CNN noted.

Berkshire Hathaway owning two pipelines that serve customers in the same states could have raised eyebrows from the Federal Trade Commission, which the company and the pipeline’s seller acknowledged in a Monday press release.

“The decision is a result of ongoing uncertainty associated with achieving clearance from the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,” Dominion, which was set to sell its Questar Pipelines to the company, said.

Dominion said it already sold gas transmission and storage assets to Berkshire in November, a deal that won’t be affected by the pipeline purchase termination and that was originally worth $4 billion, plus $5.7 billion that Berkshire Hathaway agreed to take on in debt.

Berkshire Hathaway Energy and Dominion declined to comment on this story.

Both Buffett and Dominion backing away from the pipeline deal shows that even the rich and powerful understand the regulatory threat currently posed by the US government — specifically from the FTC.

The agency is now helmed by Lina Khan, a big tech critic whose extensive antitrust law background has reshaped modern-day antitrust discussion. Khan, a Democrat, is joined by two other Democratic commissioners and two Republicans.

Apart from the FTC’s new make-up, lawmakers are also zeroing in on reshaping antitrust regulation in the US. Congress unveiled a package of five bills in June that are intended to keep big tech companies from becoming too large and powerful.

And just last week, President Joe Biden signed an executive order to combat corporate consolidation, or mergers, in the US economy, a move the administration said would increase healthy competition.

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