Berkshire Hathaway Energy has entered into an agreement to acquire Oncor Electric Delivery Company in a deal that values the power distributor’s equity at $11.25bn.
The subsidiary of Warren Buffett’s Berkshire Hathaway has agreed to buy Dallas-based reorganized Energy Future Holdings, the parent company of Oncor, for $9bn in cash.
Oncor CEO Bob Shapard said: “By joining forces with Berkshire Hathaway Energy, we will gain access to additional operational and financial resources as we continue to position Oncor to support the evolving energy needs of our state.”
Following the completion of the transaction, Shapard will assume the role of executive chairman of the Oncor Board, while Allen Nye will become the CEO of Oncor.
The transaction is subject to closing conditions, including the receipt of required state, federal and bankruptcy court approvals. It is expected to be completed in the fourth quarter of 2017.
Nye said: “We are excited to begin the regulatory approval process as this transaction has significant support across our key stakeholders.”
In June, Texas regulators had denied approval for NextEra Energy’s proposed deal to buy the state’s largest transmission operator Oncor for a second time.
The Public Utility Commission of Texas approved an order to reject a rehearing of NextEra's application to acquire Oncor for $18.4bn.
NextEra’s deal faced rejection from the regulators initially in March this year, as they concluded that the deal was not in the public interest.
In August 2016, NextEra agreed to purchase an 80% stake in Oncor from Energy Future Holdings (EFH). The sale was part of EFH’s restructuring plan to exit bankruptcy.
Headquartered in Dallas, Texas, Oncor is an electric transmission and distribution service provider that serves 10 million customers across Texas. Its distribution and transmission system consists of about 122,000 miles of lines and more than 3.4 million meters.
Image: Electric power transmission with overhead line. Photo courtesy of Guam~commonswiki/Wikipedia.