Berkshire Hathaway Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway Inc., announced that it has executed a definitive merger agreement with Energy Future Holdings Corp. (EFH). Berkshire Hathaway Energy will acquire reorganized EFH, which will ultimately result in the acquisition of Oncor, an energy delivery company serving approximately 10 million Texans.
“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!” said Warren Buffett, chairman of Berkshire Hathaway. “Oncor is a great company with similar values and outstanding assets.”
Berkshire Hathaway Inc. already has a significant presence in Texas with multiple headquarters in the state, including BNSF Railway Company; Acme Brick Company; Justin Brands, Inc.; McLane Company, Inc.; Berkshire Hathaway Automotive; Star Furniture Company; TTI, Inc.; Charter Brokerage; LiquidPower Specialty Products Inc.; and Allie Beth Allman & Associates.
The all-cash consideration for reorganized EFH is $9 billion implying an equity value of approximately $11.25 billion for 100% of Oncor and is subject to closing conditions, including the receipt of required state, federal and bankruptcy court approvals. The transaction is currently expected to be completed in the fourth quarter of 2017.
Greg Abel, Berkshire Hathaway Energy chairman, president and CEO, said, “This partnership combines the strengths of two companies that share a common goal of providing exceptional customer service and a commitment to invest in critical infrastructure that will make the Texas energy grid even stronger and more reliable.”
Effective upon closing of the transaction, Bob Shapard, CEO of Oncor, will assume the role of executive chairman of the Oncor Board, and Allen Nye will assume the role of CEO of 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,” said Shapard. “Being part of Berkshire Hathaway Energy is a great outcome for Oncor. Oncor will remain a locally managed Texas company headquartered in Dallas, committed to the communities we serve, and our customers will continue to receive the safe and reliable service they have come to expect from our dedicated team of employees.”
“We are excited to begin the regulatory approval process as this transaction has significant support across our key stakeholders,” Nye said. “The stakeholders are eager to obtain a great outcome for Texas.”
“We are pleased to be working with Texas and stakeholders to ensure Oncor continues to be a strong electric transmission and distribution company. Oncor is an exceptional company with great employees and an excellent management team,” said Abel.
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