Sempra Energy snatches Oncor from Warren Buffett's grasp with $9.45bn takeover deal

William Turvill
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Warren Buffett's Berkshire Hathaway agreed a deal to buy Oncor for $9bn in July (Source: Getty)

Sempra Energy has agreed a $9.45bn (£7.34bn) deal to buy Oncor, snatching the power transmission company from the grasp of Warren Buffett.

San Diego-based Sempra announced the deal today, after Oncor’s owner, Energy Future, abandoned a deal to sell to Buffett’s Berkshire Hathaway after coming under pressure from an activist investor.

Berkshire Hathaway agreed to buy Dallas-based Oncor for $9bn in July. The deal broke down after Energy Future’s largest creditor, Elliott Management, said the sale undervalued Oncor.

Elliott, which was said to have explored making a larger bid for Oncor itself, has indicated it is supportive of the Sempra offer.

The active investor said: “Elliott is supportive of the proposed Sempra transaction, which provides substantially greater recoveries to all creditors of Energy Future than the proposed Berkshire transaction.”

Buffett’s firm, which is known for not engaging in bidding wars, indicated last week that it would not be increasing its offer for Oncor.

Sempra, which was advised by Lazard and Morgan Stanley, said it would be paying approximately $9.45bn in cash to acquire Energy Future and its 80 per cent ownership of Oncor. It said the deal would have an enterprise value of around $18.8bn.

“Both Sempra Energy and Oncor share more than 100 years of experience operating utilities that deliver safe, reliable energy to millions of customers,” said Sempra boss Debra Reed.

“With its strong management team and long, distinguished history as Texas’ leading electric provider, Oncor is an excellent strategic fit for our portfolio of utility and energy infrastructure businesses.

“We believe our agreement with Energy Future will help ensure that Texas utility customers continue to receive the outstanding electric service they have come to expect from Oncor and provide stability to Oncor’s nearly 4,000 employees.”

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