Warren Buffett Unveils Deal To Buy Big Piece Of Texas Electric Grid
Warren Buffet is making a play for Texas’ largest electric transmission utility. Berkshire Hathaway, his multinational conglomerate, has unveiled an $18 billion deal to buy Oncor.
By Jim Malewitz
Warren Buffet is making a play for Texas’ largest electric transmission utility.
Berkshire Hathaway, the famed billionaire’s multinational conglomerate, unveiled an $18 billion deal Friday to buy Oncor, whose roughly 120,000 miles of transmission and distribution lines deliver power to more than 3 million homes and businesses in North and West Texas.
If approved, the deal could help deliver Energy Future Holdings, Oncor’s parent company and Texas’ largest power conglomerate, from one of the largest corporate bankruptcies in American history. That company, which filed for Chapter 11 bankruptcy in 2014, is saddled with about $50 billion in debt.
“Oncor is an excellent fit for Berkshire Hathaway, and we are pleased to make another long-term investment in Texas — when we invest in Texas, we invest big,” Buffett said in a joint news release from Berkshire Hathaway and Oncor.
The proposed merger would need the sign-off of the Delaware judge overseeing Energy Future Holdings’ bankruptcy, along with approvals from the Public Utility Commission of Texas and federal regulators.
Berkshire Hathaway is venturing where other companies have stumbled. 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. Both saw pushback from consumer advocates — those concerned about the deals’ impact on Oncor’s financial health, independence and rates it charges — and failed to gain full approval from the state’s Public Utility Commission.
Berkshire Hathaway suggests this deal will be different. The company circulated a document with 44 regulatory commitments that it says parties that might intervene at the utility commission have already agreed to.
Bob Shapard, Oncor’s CEO, called the latest proposal “a great outcome for Oncor.”
“By joining forces with Berkshire Hathaway Energy, we will gain access to additional operational and financial resources as we continue to position Oncor to support the evolving energy needs of our state,” he said in a statement.
Under the proposal, Oncor’s headquarters would stay in Dallas, and it would remain locally managed.
This story originally published by The Texas Tribune.
