Warren Buffet loses bidding war on Texas power firm
By Agence France-Presse
Sempra Energy announced Monday that it reached a deal to acquire Oncor, a Texas energy distributor, topping a bid by Warren Buffett’s Berkshire Hathaway.
San Diego-based Sempra Energy will pay $9.45 billion in cash, the company said in a news release. It will also assume $9 billion in debt.
That overtakes the $18 billion in cash and assumed debt under a Berkshire dealannounced July 7. Oncor holds the Texas energy transmission assets of bankrupt giant Energy Futures Holdings (EFH).
The Berkshire agreement had been opposed by Energy Futures investor Elliott Management, which is led by billionaire Paul Singer. Berkshire had signaled it did not plan to lift its bid.
Oncor services about 10 million customers in Texas and employs about 3,700 people. Sempra has about 32 million customers in the US and Mexico and employs about 16,000.
“With its strong management team and long, distinguished history as Texas’ leading electric provider, Oncor is an excellent strategic fit for our portfolio of utility and energy infrastructure businesses,” said Sempra chief executive Debra Reed.
EFH was a casualty of the US shale boom, having wrongly bet natural gas prices would surge when they instead sank due to copious supply in the wake of the American shale boom.
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.
State regulators have rejected two previous attempts to buy the Oncor assets as not in the public interest. (AFP)