Sempra is said to be near deal to acquire Oncor Electric

CEO Warren Buffett plays bridge during the Berkshire annual meeting weekend in Omaha Nebraska U.S. on May

CEO Warren Buffett plays bridge during the Berkshire annual meeting weekend in Omaha Nebraska U.S. on May

San Diego-based Sempra expects to own about 60 per cent of the reorganised holding company after the transaction that is valued at $18.8 billion, including Oncor's debt, it said late on Sunday.

Sempra Energy's Oncor offer bested the $9 billion in cash Berkshire Hathaway put forward before facing resistance from creditors in bankruptcy court. Hedge fund Elliott Management, which owns a significant portion of Oncor's debt, opposed Berkshire's takeover bid, saying it wasn't enough.

Sempra said Monday that it will also pick up $9.35 billion of the company's debt. Sempra has about 32 million customers in the USA and Mexico and employs about 16,000.

Berkshire Hathaway Energy CEO Greg Abel then issued a statement that the company would stand firm on its offer and would not increase its bid. Berkshire Hathaway Energy is headquartered in Des Moines, Iowa, U.S.A.

Sempra's shares were up 1.2 percent at $117.79 after hitting an all-time high of $118.78 on Monday after the company said the deal would add about 10 million of Oncor's Texas customers to its base and increase its earnings starting next year. Buffett is known for avoiding bidding wars.

The deal is subject to approvals from Texas utility regulators as well as a bankruptcy court overseeing the three-year old EFH proceeding, one of the largest bankruptcies ever.

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Sempra Energy is venturing where other companies have stumbled. Previously, in April Texas regulators rejected a proposed $18 billion sale of Oncor to NextEra Energy Inc.

The energy company said in a statement when announcing the deal that it "will maintain the existing independence of Oncor's board of directors, which has protected Oncor and its customers during the ongoing Energy Future bankruptcy".

Dallas-based Oncor serves nearly 10 million customers and operates more than 170,590 kilometres of distribution lines. The regulatory commitments were included in an agreement signed by five parties that supported the proposal.

Energy Future was formed a decade ago by KKR & Co., TPG Capital and Goldman Sachs Capital Partners as part of the biggest leveraged buyout in history. Evercore Partners Inc is the financial adviser to Energy Future, and Kirkland & Ellis LLP is its legal adviser. A deal would be Sempra's largest since at least 1997, according to data compiled by Bloomberg, and expand the company's USA utility territory beyond California.

"It is important for Oncor to remain financially strong", said Reed, who expects the transaction to bring a "satisfactory resolution" to the bankruptcy case.

When the deal is completed, the Oncor Chief Executive Bob Shapard will become executive chairman of Oncor's board. Oncor holds the Texas energy transmission assets of bankrupt giant Energy Futures Holdings.

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