The third time could be the charm for Dallas-based Oncor Electric Delivery Co., which may have a buyer capable of winning approval from state regulators at last. On Friday, billionaire investor Warren Buffett’s Berkshire Hathaway Inc. said it intends to snap up Oncor for $9 billion.
The biggest electric-transmission operator in Texas, Oncor has been seeking a buyer since its parent Energy Future Holdings—which holds an 80 percent stake in the company—filed for Chapter 11 bankruptcy protection three years ago. In April, the Public Utility Commission of Texas rejected a sale of Oncor to Florida’s NextEra Energy. The PUC also shot down a bid for Oncor last year by Dallas-based Hunt Consolidated Inc.
Bloomberg, citing anonymous sources familiar with the situation, said Berkshire’s offer for Oncor, including debt, is valued at about $17.5 billion. That’s roughly $1 billion less than NextEra’s bid, which totaled $18.4 billion. However, Berkshire is said to have promised to satisfy several concerns raised previously by state regulators. The concerns include limiting the buyer’s control over both the Oncor board and the company’s dividends, and promising not to cut jobs, wages, or benefits for Oncor’s employees for at least two years.
The deal has to win approval not only of the PUC, but also of federal regulators and a bankruptcy judge. But the early buzz seems positive, in part because of Berkshire Hathaway’s size and stellar reputation. In North Texas, the Omaha, Neb.-based conglomerate already owns companies including BNSF Railway, Acme Brick, Nebraska Furniture Mart, and Allie Beth Allman & Associates.
