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Behind Warren Buffett’s first post-pandemic deal

Berkshire Hathaway swooped in to buy Dominion Energy’s gas pipeline network in a $9.7 billion deal after Dominion and Duke Energy canceled plans to build the controversial Atlantic Coast Pipeline.

Berkshire will pay $4 billion for Dominion’s gas network assets, including more than 7,700 miles of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage.

• The Dominion purchase was Mr. Buffett’s biggest in four years, putting to use some of Berkshire’s $137 billion cash pile. And it will probably quell some investor anxiety about Mr. Buffett’s recent drought of deal-making.

It follows the unexpected death of the Atlantic pipeline. Just last month, Dominion and Duke scored a victory when the Supreme Court ruled that the pipeline — which would have moved natural gas from West Virginia across 600 miles to Virginia and North Carolina — could be built under the Appalachian Trail, overruling objections from environmental groups.

• The energy companies said that the six-year-old project faced more potential legal battles and costly delays.

The pipeline’s cancellation may have also been a bet on Democratic victories in upcoming U.S. elections. In announcing the deal with Berkshire, Dominion emphasized a “narrowing” focus on becoming a more “sustainability focused” utility, reducing its reliance on fossil fuels. (Power companies like Dominion are moving toward using more renewable energy sources, but haltingly so.)

But Mr. Buffett seems more interested in the economics of the deal. Berkshire’s energy division — which Mr. Buffett has called one of the conglomerate’s “lead dogs” — runs a sprawling empire of utilities, natural gas pipelines and other power and electricity assets. Buying the Dominion assets would more than double its market share of natural gas movement in the U.S., to 18 percent.

• Berkshire hasn’t ignored the politics of pipelines in other situations. This spring, it decided not to invest $3 billion in a $6.7 billion liquefied natural gas export terminal in Quebec amid protests by environmental activists and Indigenous groups.

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Credit…Valentyn Ogirenko/Reuters

Here’s what is happening

Uber sealed a deal for Postmates. It plans to announce as soon as today that it will buy the meal-delivery company for about $2.65 billion, The Times’s Mike Isaac and Erin Griffith report. The takeover is a consolation prize after missing out on buying the far larger Grubhub.

Coronavirus cases are still surging. Fifteen U.S. states broke their single-day records for infections last week, with Florida and Texas reporting new highs over the weekend. Meanwhile, drug researchers are competing against one another to sign up volunteers to test Covid-19 vaccines.

Two pro sports teams are weighing name changes amid the national uproar over racial injustice. The Washington Redskins vowed to conduct “a thorough review” after a major sponsor, FedEx, called on the team to drop the name. (FedEx’s C.E.O., Fred Smith, is reportedly considering selling his stake in the franchise.) And in baseball, the Cleveland Indians said they were open to holding discussions to “determine the best path forward.”

The British government joined a successful bid for control of a satellite company. Britain and Bharti Global agreed to pay $1 billion to buy OneWeb out of bankruptcy protection. For the U.K., it’s part of a plan to build a satellite network to provide broadband and navigation services.

A U.S. senator plans to propose a bill blocking out middle seats on airplanes. Senator Jeff Merkley, Democrat of Oregon, said he was inspired to draft the legislation after flying on a packed American Airlines flight last week.

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Credit…Wilfredo Lee/Associated Press

In search of new newspaper barons

A bankruptcy auction will be held for McClatchy, the newspaper chain that owns the Fort Worth Star-Telegram, Miami Herald, Sacramento Bee and dozens of other local outlets, on Wednesday. The sale process is expected to wrap up by the end of the month, revealing investors’ appetite for a high-profile industry hit hard by the pandemic.

There are many scenarios for the fate of the local news group, the country’s second-largest. McClatchy’s biggest creditor, the hedge fund Chatham Asset Management, has submitted an offer worth around $300 million, setting a floor for bids. Interest from other prospective buyers for the company, which filed for bankruptcy protection in February, reportedly waned as the pandemic sunk the advertising market. Victory for a financial buyer could raise fears of more job cuts at already-struggling local papers.

• “We’re confident we will have a robust process,” McClatchy’s lead bankruptcy lawyer said.

Who else is in the mix? There are some intriguing possibilities, either in the auction or as part of a post-sale restructuring that could split off specific titles.

• Billionaire benefactors: Mayors of cities with McClatchy papers, like Miami and Sacramento, are pushing for local owners “motivated primarily by a desire to serve the broader public interest, not the narrow bottom line,” as Miami’s mayor, Francis Suarez, put it. That could be easiest for a wealthy person with money to spare and interest in a local media platform (for whatever reason) — think Sheldon Adelson and The Las Vegas Review-Journal, Jeff Bezos and The Washington Post, John Henry and The Boston Globe, or Patrick Soon-Shiong and The Los Angeles Times.

• Nonprofit saviors: Nieman Lab suggests that a “savior” bidder could buy the chain, or some newspapers owned by it, and turn them into nonprofit enterprises. In 2006, McClatchy bought Knight Ridder, the rival chain founded by the family behind the Knight Foundation, which uses its $2.4 billion endowment to support a wide variety of journalistic causes. We’d note that the foundation has shown interest in some of the procedural aspects of McClatchy’s bankruptcy.

The week ahead

⚖️ The U.S. Supreme Court may issue rulings this week on eight cases, including the release of President Trump’s tax returns, birth control in employer-sponsored health care plans and robocalls to cellphones. The court’s extended virtual session has pushed its work into July for the first time in more than 20 years.

🇺🇸🇲🇽 In his first foreign trip as Mexico’s president, Andrés Manuel López Obrador travels to Washington — on a commercial flight — to meet Mr. Trump at the White House on Wednesday. The two plan to celebrate the new North American trade deal, which took effect last week; Prime Minister Justin Trudeau of Canada hasn’t yet decided whether he will attend.

🇬🇧🇨🇦 Speaking of Canada, on Wednesday the finance chiefs of Canada and Britain will discuss the impact of the coronavirus-driven downturn. In Ottawa, Finance Minister Bill Morneau will present the first official post-pandemic projection of Canada’s federal deficit to the country’s Parliament. In London, Britain’s chancellor, Rishi Sunak, will unveil the latest outlook for the British economy, along with potential policy changes to taxes and furlough payments.

🧰 The steady decline in weekly U.S. unemployment claims is expected to stall on Thursday as several states delay or roll back reopening measures. (Deutsche Bank notes that between a third and half of G.D.P. comes from states with worsening coronavirus trends.) Initial claims have been above one million for 15 consecutive weeks.

🗣 It’s a light week for earnings, with the noteworthy names opening their books including Levi Strauss tomorrow; Bed Bath & Beyond on Wednesday; and Rolls-Royce and Walgreens Boots Alliance on Thursday.

🗓 On this day in history: On July 6, 1983, the U.S. Supreme Court ruled that employer-sponsored pension plans could no longer pay unequal benefits to women and men. Until then, annuities often paid lower monthly benefits to women, on the assumption that they would collect more over longer lifetimes than men. These annuities were most commonly offered in pensions for public-sector employees. The decision did not apply retroactively.

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Credit…The New York Times

Should your salary be public information?

Last week, we highlighted a project by Times Opinion that got more than 1,000 people to share details about their salaries and whether they thought they were under- or overpaid. Most said that knowing exactly what co-workers received would help them determine whether their own pay was normal or fair. Many DealBook readers wrote in, and here is a selection of their responses, lightly edited for clarity and length:

“If workers across the spectrum joined forces to demand salary transparency in their companies, it would be a huge leap for racial justice.” — Cate in Silver Spring, Md.

“Pay transparency is just another fad. If you don’t think you are fairly compensated, seek a raise or find another job.” — Dan in Muskegon, Mich.

  • Frequently Asked Questions and Advice

    Updated June 30, 2020

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


“Yes, pay should be disclosed. I think it would cause employers to close the gaps and not just give raises to those who speak up or threaten to leave.” — Kenny in Omaha, Neb.

“List salaries by position, but not by name. You’ll know who you are and can then see how the company values you.” — Doug in Madison, Wis.

“Although secrecy can be defended around privacy concerns, whose privacy is being protected? In the case of making salary information public, the privacy being protected is the company’s, not the individual’s. Why does the company want to keep its salary information private? The conclusion is because it has something to hide.” — Elizabeth in Takoma Park, Md.

The speed read

Deals

• SoftBank reportedly does not plan to change the way its underperforming Vision Fund is run, apparently rebuffing pressure from the activist investor Elliott Management. (Reuters)

• Speaking of activist investors, investment bankers are warning corporate boardrooms to prepare for a resurgence in attacks by hedge funds. (FT)

• The grocery delivery company Instacart has raised another $100 million in funding, at a nearly $14 billion valuation. (Axios)

Politics and policy

• President Trump signed into law an extension of the Paycheck Protection Program, the federal small-business aid initiative, to Aug. 8. (Axios)

• Peter Thiel, Mr. Trump’s biggest supporter in Silicon Valley, is reportedly sitting on the sidelines for November’s election. (WSJ)

Tech

• Netflix has beaten Hollywood on several fronts — a list that now includes signing up Black content creators. (NYT)

• Britain is reportedly preparing to eliminate Huawei’s technology from its 5G wireless network, after pressure from the U.S. (Bloomberg)

Best of the rest

• As department stores disappear, malls could be next. (NYT)

• America now has nearly 800 billionaires, a record. (Recode)

• With fans not allowed inside its stadium, the Japanese baseball team sponsored by SoftBank put robots in the stands instead. (Business Insider)

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