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Berkshire Hathaway, Oncor Electric Deal Worth $9B Announced

Image: Berkshire Hathaway, Oncor Electric Deal Worth $9B Announced

Warren Buffett. (Alex Wong/Getty Images)

By    |   Friday, 07 Jul 2017 12:15 PM

Berkshire Hathaway Energy announced Friday that it plans to buy Oncor Electric Delivery Co. in a $9 billion bet that it can convince Texas regulators that a takeover deserves approval and is in the public's best interest.

Dallas-based Oncor is the state's largest electricity transmission company, connected to more than 3.4 million homes and businesses across roughly 122,000 miles of transmission and distribution lines, Reuters reported. The company posted $431 million of profit in 2016 and similar sums in the prior three years, said the news service.

Berkshire Hathaway will purchase a reorganized Energy Future Holding Corp. so it can get access to Oncor, Reuters said.

"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," Warren Buffett, chairman of Berkshire Hathaway, said in a statement. "Oncor is a great company with similar values and outstanding assets."

Buffett and Berkshire Hathaway must now deal with the Texas Public Utility Commission which has already shot down takeover bids from NextEra Energy Inc. this year and privately held Hunt Consolidated Inc. in 2016, Reuters said.

A spokesman for the commission declined to comment on Berkshire Hathaway's chances for approval. The deal also requires approval from a federal bankruptcy court that's overseeing the reorganization of Energy Future Holdings, USA Today noted.

Energy Future Holdings, the parent company of Oncor, has spent the past three years in a Delaware bankruptcy court hammering out its reorganization plan, Forbes noted in February.

Oncor chief executive Bob Shapard said in a Berkshire Hathaway statement that he believes the deal is solid.

"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," Shapard said in the statement.

"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," he continued.

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Berkshire Hathaway Energy announced Friday that it plans to buy Oncor Electric Delivery Co. in a $9 billion bet that it can convince Texas regulators that a takeover deserves approval and is in the public's best interest.
berkshire hathaway, oncor, electric, deal
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2017-15-07
Friday, 07 Jul 2017 12:15 PM
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