Sempra Energy bids $9.45B for Oncor, topping Buffett offer

Munger partnership

Munger partnership

Sempra Energy is buying Texas power transmitter Oncor for $9.45 billion in cash, wresting it away from Warren Buffett's Berkshire Hathaway.

Sempra, which owns a utility in California and is developing an LNG export project on Texas' Gulf Coast, would pay around $9.45 billion in cash to acquire Energy Future and its 80 percent stake in Oncor.

The development represents a rare blow for Buffett, who avoids bidding wars for companies and had swooped in two months ago to buy Oncor after two previous attempts by Energy Future to sell it were blocked by Texas regulators.

Sempra said Monday that it will also pick up $9.35 billion of the company's debt.

Lazard and Morgan Stanley were financial advisors to Sempra Energy and, White & Case LLP, acted as its legal advisor.

Total buys Maersk's oil business in $7.45bn deal
Moller–Maersk 97.5 million shares, based on the average Total share price on the 20 business days prior to August 21. The deal may yet be the Maersk's biggest single transaction yet in the first steps to break itself up.

Sources told Reuters earlier that Sempra had decided to make an offer for Oncor in the last three weeks, after seeing the opposition that Berkshire faced from Elliott. We believe our agreement with Energy Future will help ensure that Texas utility customers continue to receive the outstanding electric service they have come to expect from Oncor and provide stability to Oncor's almost 4,000 employees.

Sempra's bid marks yet another twist in the fate of Energy Future, which was acquired by private equity firms in 2007 for a record-setting $45 billion - but quickly ran into trouble under a huge debt load.

The deal may put an end to the escalating battle between Buffett and Singer and would be Sempra's largest acquisition since it was formed in 1998, based on data compiled by Bloomberg, expanding its USA utility territory beyond California. The conglomerate, which filed for Chapter 11 bankruptcy in 2014, is saddled with about $50 billion in debt.

"It is important for Oncor to remain financially strong", Reed said.

Sempra said in its statement 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". Reed said the purchase "will help ensure that Texas utility customers continue to receive outstanding electric service". Berkshire did not immediately return requests for comment. Allen Nye, now Oncor's general counsel, would be named the utility's CEO, according to a press release. The regulatory commitments were included in an agreement signed by five parties that supported the proposal.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.