NextEra Energy has entered into an agreement to acquire the remaining 20% stake in Texas power transmission firm Oncor Electric Delivery in a cash deal worth $2.4bn.
In July, Florida-based NextEra announced that it would purchase 80% stake in Oncor from bankrupt Energy Future Holdings (EFH) for $18.4bn.
In the latest transaction, the company agreed to merge with Texas Transmission Holdings (TTHC), which holds an indirect stake of about 20% in Oncor.
The power generation company has also reached an agreement to acquire the remaining 0.22% interest in Oncor that is owned by Oncor Management Investment (OMI) for approximately $27m.
NextEra Energy chairman and chief executive officer Jim Robo said: “We appreciate TTHC’s commitment to reaching this agreement and believe this transaction further affirms our long-term commitment to partnering with Oncor for the benefit of its customers and the state of Texas.
“We, together with Oncor, look forward to filing our joint application by 1 November with the Public Utility Commission of Texas seeking approval of our proposed acquisition of Oncor.”
Under the terms of the merger agreement, NextEra Energy will pay 100% of the merger consideration in cash.
Following the completion of the merger, TTHC will have zero debt.
If approved, NextEra Energy’s transactions with EFH, TTHC and OMI would result in 100% percent ownership of Oncor.
NextEra Energy expects the TTHC transaction to be completed in the first half of 2017.
It is also subject to approval by the Federal Energy Regulatory Commission.
Oncor CEO Bob Shapard said: “If the current proposal is approved, looking forward, Oncor will be backstopped by a very strong balance sheet and will have a partner in NextEra Energy that is committed to continuing our efforts to build a safer, smarter, more reliable electric grid.”
Image: Electric power transmission with overhead line. Photo courtesy of Guam~commonswiki/Wikipedia.