Berkshire Hathaway Outbid By Sempra For Oncor Electric Delivery
Sempra Energy (SRE) announced the $9.45 billion cash acquisition of Energy Future Holdings, which indirectly owns 80% of Dallas-based Oncor Energy Delivery, clinching the deal just six weeks after Warren Buffett’s Berkshire Hathaway (BRKB) had struck an agreement to buy the largest electric transmission and distribution system in Texas.
The enterprise value of the Sempra-Oncor deal is $18.8 billion, including Oncor’s debt, and Sempra expects the acquisition to add to earnings starting in 2018. The deal is expected to close in the first half of next year.
Sempra shares gapped up 5% to 122.50 in the stock market today. Berkshire Hathaway’s class-B shares edged up 0.3%.
In mid-July, Berkshire Hathaway had made a bid for Energy Future Holdings for $9 billion in cash, but on Wednesday the Wall Street Journal reported that hedge fund Elliott Management had acquired a particular class of debt that would allow it to block Berkshire’s purchase of the company.
The hedge fund, which had reportedly been structuring its own deal for Oncor, opposed the acquisition on the grounds that “the Berkshire transaction does not provide such value.”