Warren Buffet's Berkshire Hathaway energy unit to buy struggling US power firm Oncor

Warren Buffett’s Berkshire Hathaway Energy is buying one of the largest power-transmission companies in the US for US$9bn in cash.

Berkshire Hathway Inc.’s (NYSE:BRK.A) energy unit will take over bankrupt Energy Future Holdings Corp., the parent company of Oncor Electric Delivery Co, in a deal that values Oncor’s equity at about US$11.25bn.

Texas-based Energy Future had turned down offers from NextEra Energy and Hunt Consolidated before agreeing the deal with Berkshire.  Last week NextEra offered US$18bn to buy the company in its third attempt while the Hunt family made a failed approach last year.

The takeover of Energy Future will be vital to ending its bankruptcy as it has been working since 2014 to restructure US$50bn of debt.

Buffett lost US$873mlnon a US$2bn bond investment in Energy Future in 2013.

The deal is subject to approval by Texas regulators, which has blocked earlier attempts to sell the business.  It is expected to close in the fourth quarter of 2017.

“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,” said Oncor chief executive Bob Shapard.

Following completion of the deal, Shapard will be appointed executive chairman while Allen Nye will become Oncor’s new chief executive. 

Story by ProactiveInvestors