Oncor Electric Delivery Company (Oncor) has signed an agreement to acquire 100% equity interest of InfraREIT for $1.275bn.
Image: Oncor to acquire InfraREIT for $1.2bn. Photo courtesy of rawpixel on Unsplash.
InfraREIT is involved in owning and leasing rate-regulated electric transmission assets in the state of Texas.
The transaction includes acquisition of all the limited-partnership units in its subsidiary InfraREIT Partners by Oncor, which is 80% owned by Sempra.
Besides, it includes InfraREIT’s outstanding debt, which stood at about $945m as of June 30, 2018.
Sempra Energy will acquire a 50% limited-partnership interest in a holding company that will own Sharyland Utilities (Sharyland) for nearly $98m.
Oncor intends to fund its acquisition of InfraREIT with capital contributions proportionate to their ownership interests from Sempra Energy and TTI.
Oncor CEO Allen Nye said: “The purchase of InfraREIT gives us access to high-quality transmission assets that are adjacent to our service territory and are a great fit for our portfolio.
“As growth continues across Texas and new generation projects continue to come online, this acquisition positions us to make future investments in transmission infrastructure that will better serve the ERCOT market and our customers.”
The transaction is subject to approvals from the Public Utility Commission of Texas (PUCT) and Federal Energy Regulatory Commission.
Following the completion of the acquisition, Oncor will own InfraREIT’s electric transmission and distribution business in Central, North and West Texas, and Sharyland will own assets in South Texas.
Headquartered in Dallas, Oncor is a regulated electricity distribution and transmission business.
It delivers power to more than 3.6 million homes and businesses and operating more than 134,000 miles of transmission and distribution lines in Texas.
Sempra Energy CEO Jeffrey W Martin said: “This transaction advances our growth strategy and will expand our Texas regulated utility platform.
“These assets are highly desirable and supported by strong economic growth, attractive demographic trends and increased demand for electric transmission in Texas.
“We expect these acquisitions to be accretive to earnings. We also look forward to working with Sharyland on further developing electric transmission and related infrastructure in Texas.”