Report: Goldman, Morgan join on energy bid

NEW YORK (CNNMoney.com) -- Wall Street rivals Goldman Sachs Group and Morgan Stanley are quietly collaborating on a massive private-equity play for the oil and gas assets of utility company Dominion Resources, according to a published report.

The Wall Street Journal reported on the joint effort of the investing arms of Goldman (Charts) and Morgan Stanley (Charts), which are typically bitter competitors. It said the deal could top $15 billion.

The paper said the discussions are a sign of how private equity is changing life on Wall Street, as investment banks are angling to become both competitor to and collaborator with buyout shops.

The paper reports such collaborations are more likely now that Morgan Stanley has become active again in private equity under CEO John Mack, even hiring a former Goldman executive to lead the effort.

Goldman and Morgan Stanley's efforts for Dominion (Charts) also include a consortium that includes Madison Dearborn Partners, Warburg Pincus, First Reserve (Charts), Carlyle Group and its affiliate Riverstone Holdings.

The paper reports that a second group eyeing Dominion includes Blackstone Group, Texas Pacific Group and Kohlberg Kravis Roberts & Co.

Richmond, Va.-based Dominion has a market capitalization of $28.5 billion. But the deal would be for the oil and gas assets of the company, leaving its consumer electricity and natural gas utility business with Dominion.

A $15 billion deal for those Dominion assets would rival some of the larger deals in the energy sector, including Anadarko Petroleum's (Charts) $16.4 billion purchase of Kerr-McGee in 2006 and Chevron's (Charts) $18 billion acquisition of Unocal Corp. in 2005.

2007: Year of the mega-buyout