Sempra Energy launches fourth attempt to acquire Oncor

Sempra Energy launches fourth attempt to acquire Oncor

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.

Sempra is simply Oncor's latest suitor after a series of acquisition bids and rejections over the last few years.

In July, the energy unit of Berkshire Hathaway agreed to buy Oncor for $9 billion, but the deal ran into trouble after Energy Future's biggest creditor Elliott Management Corp opposed the sale arguing it undervalued Oncor.

Late previous year, Florida's NextEra Energy tried to acquire Oncor in an $18.4 billion deal that the PUC declared was not in the public interest because customers would have had to pay for 15 percent of NextEra's $45 billion in debt.

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.

An agreement for Oncor is key to ending the bankruptcy of Energy Future, which has been restructuring nearly US$50 billion of debt for more than three years.

Sempra received financing commitments for the deal from RBC Capital Markets and Morgan Stanley, it said in its statement.

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In 2014 EFH, which was the 2007 product of the largest ever leveraged buyout, filed for bankruptcy after years of struggling against the shale boom, which drove down prices for electricity as well as gas. Buffett is known for avoiding bidding wars.

Sempra Energy's Oncor offer bested the $9 billion in cash Berkshire Hathaway put forward before facing resistance from creditors in bankruptcy court. Energy Future's earlier efforts to sell the firm have failed.

Oncor services about 10 million customers in Texas and employs about 3,700 people.

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

As part of the transaction, Sempra Energy has committed to support Oncor's plan to invest $7.5 billion over a five-year period to expand and reinforce its transmission and distribution network.

When the transaction closes, Oncor CEO Bob Shapard is to become executive chairman of the board, and Allen Nye, general counsel, would become CEO.

The Texas Tribune provided this story.

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