According to a corporate release, Sempra Energy announced an agreement to acquire Energy Future Holdings (EFH), the indirect owner of 80% of Oncor Electric Delivery Company (Oncor). Under the agreement, Sempra Energy will pay approximately $9.45 billion in cash to acquire EFH and its ownership in Oncor. The enterprise value of the transaction is approximately $18.8 billion, including the assumption of Oncor’s debt. Sempra Energy expects to fund the $9.45 billion transaction using a combination of its own debt and equity, third-party equity and $3 billion of expected investment-grade debt at the reorganized holding company. Sempra Energy’s release notes that it will maintain the existing independence of Oncor’s board of directors.
As part of the transaction, Sempra Energy has committed to support Oncor’s plan to invest $7.5 billion of capital over a five-year period to expand and reinforce its transmission and distribution network. At the completion of the transaction, Bob Shapard, Oncor’s C.E.O., will become executive chairman of the Oncor board of directors and Allen Nye, currently Oncor’s general counsel, will succeed Shapard as Oncor’s C.E.O. Both are slated to serve on the Oncor board, which will consist of 13 directors, including seven independent directors from Texas, two from existing equity holders and two from the new Sempra Energy-led holding company. The transaction is subject to customary closing conditions, including the approval of the Public Utility Commission of Texas, the U.S. Bankruptcy Court, Federal Energy Regulatory Commission and the U.S. Department of Justice under the Hart-Scott-Rodino Act.
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