The $9.45 billion cash deal to acquire Energy Future and its ownership in Oncor includes Sempra's assumption of Oncor's debt, making the total value of the transaction $18.8 billion. Sempra Energy is buying Texas power transmitter Oncor for $9.45 billion in cash, wresting it away from Buffett's Berkshire Hathaway.
Elliott recently bought debt in Oncor's parent in its latest effort to block Berkshire's bid, people familiar with that matter said August 16. Instead, Energy Future lawyer Chad Husnick told the court the Dallas-based company had made a decision to "pursue another path" with Sempra because of the value of the bid, a lower break-up fee and, most importantly, support from Elliott.
That turned out to be Sempra, which is based in San Diego and provides power to 32 million customers.
Berkshire issued a statement last week saying it had no plans to raise its offer for Oncor.
Sempra Energy, a Fortune 500 conglomerate, runs utilities and invests in energy infrastructure.
Buffett's firm, which is known for not engaging in bidding wars, indicated last week that it would not be increasing its offer for Oncor.
The proposed merger would need the sign-off of the DE judge overseeing Energy Future Holdings' bankruptcy, along with approvals from the Public Utility Commission of Texas and federal regulators. Many of these factors are outside the control of Berkshire Hathaway Energy Company and could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Dallas-based Oncor serves nearly 10 million customers and operates more than 170,590 kilometres of distribution lines. Over the past two years, the Ray L. Hunt family of Dallas and Florida-based NextEra Energy have separately tried to buy Oncor, Energy Future's most coveted asset. The regulatory commitments were included in an agreement signed by five parties that supported the proposal.
Sempra Energy's announcement Monday was more muted, but the company said Oncor under the deal would stay in Dallas under local management and keep its independent board of directors, which would insulate it from the financial ups and downs of its parent company.
Energy Future was formed a decade ago by KKR & Co., TPG Capital and Goldman Sachs Capital Partners as part of the biggest leveraged buyout in history.
Sempra expects to close the sale in the first half of next year.
Reed added: "It is important for Oncor to remain financially strong". To gain possession of Oncor, Sempra will acquire the reorganized Energy Future Holdings Corp. Allen Nye, now Oncor's general counsel, will succeed Shapard as Oncor CEO.