Sept. 29 (Bloomberg) -- Warren Buffett's MidAmerican Energy Holdings Co. named Chairman David Sokol to the board of BYD Co., after the U.S. company agreed to buy a stake of about 10 percent in China's biggest rechargeable batteries maker.

MidAmerican and BYD will co-operate on the development of rapid-charge batteries for storing power from wind and solar generation, Sokol said in a briefing in Hong Kong today. MidAmerican, a unit of Buffett's Berkshire Hathaway Inc., will become the biggest non-Chinese investor in Shenzhen, south China-based BYD after agreeing to pay HK$1.8 billion ($232 million) for the stake.

BYD shares surged by a record in Hong Kong trading today. JPMorgan Chase & Co. called Buffett's investment a ``huge vote of confidence,'' while Merrill Lynch & Co. said the 78-year-old billionaire investor was probably drawn by the Chinese company's rechargeable batteries used in hybrid vehicles.

``The rationale behind this investment is BYD's unique exposure to both lithium-ion battery as well as its related hybrid electric vehicle business,'' according to Merrill Lynch analyst Daniel Kim, who rates BYD shares ``buy.'' The ``HEV market growth is exploding.''

MidAmerican's decision to invest in BYD follows two months of talks between the companies, BYD Chairman Wang Chuanfu said at today's briefing. The investment will allow the Chinese company to accelerate spending in its auto business, he said.

Revenue Jumped

First-half profit fell 7 percent to 596 million yuan ($87 million), BYD reported last month, as raw material costs increased. Revenue jumped 44 percent to 12.4 billion yuan on increased sales of automobiles and handset components, it said.

BYD plans to introduce the energy-efficient F0 automobile in the second half, the company said last month. The battery maker aims to sell hybrid cars in the U.S. as early as 2010, Wang said in January.

``The technologies being developed by BYD will be an integral part of the future,'' Sokol said in a Sept. 27 statement that cited the Chinese company's focus on environmental products.

MidAmerican ``will make additional investments over time if it makes sense for BYD,'' Sokol said today. The stake in BYD is for the long term, he said.

Gain Assets

The proposed investment in BYD follows MidAmerican's announcement this month that it would buy Constellation Energy Group Inc. for about $4.7 billion. MidAmerican, which has utilities in the west and Midwest of the U.S., will gain Constellation's assets including three nuclear plants and other power stations in the east of the country.

BYD gained 42 percent, the most since the shares made their debut in July 2002, to close at HK$11.90. BYD Electronic Co., the company's handset component unit, rose by a record 21 percent to HK$2.11 in Hong Kong trading today.

MidAmerican will subscribe to new BYD shares at HK$8 each, a discount of 4.8 percent from the Chinese company's closing price on Sept. 26, according to a statement filed to the Hong Kong stock exchange by the battery maker today. The U.S. power producer gains the right to name one director to BYD's board, at present comprising six persons.

BYD chairman Wang is the biggest shareholder in the Chinese company with a stake of more than 28 percent, according to today's statement. Director Lu Xiangyang owns a 11.7 percent holding.

Value Partners Group Ltd. Chairman Cheah Cheng Hye is at present the biggest international investor in BYD, controlling 74.6 million shares, according to Hong Kong exchange data. This is equivalent to a 3.5 percent stake in the battery maker, based on its share capital of 2.05 billion shares.

Buffett's Berkshire booked a $3.5 billion profit last year from selling a stake in PetroChina Co., helping Omaha-based Berkshire Hathaway post record earnings last year.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

Last Updated: September 29, 2008 07:17 EDT