As a follow-up from our July story, “Billionaire Investor Warren Buffett Sees Promise in Israel and Texas’ Economy,” Buffett’s initial plans to acquire Texas’ largest electronic transmission unit Oncor have been challenged!
Sempra Energy, an energy firm based in San Diego, California, announced in a press release on August 21st that it has reached an agreement to acquire Energy Future Holdings Corp., which owns 80% of Oncor, at $9.45 billion--outbidding Buffett by almost half a billion dollars!
In the hopes of reviving Oncor whose parent company Energy Future has had a long run of bankruptcy since 2014, Sempra Energy plans to provide the needed stability to Oncor’s over 4,000 employees while continuing to expand the energy market in Texas.
Sepra Energy chairman, president and CEO Debra L. Reed explains,” "For investors, this transaction is expected to enhance our earnings beginning in 2018 and further expand our regulated earnings base, while serving as a platform for future growth in the Texas energy market and U.S. Gulf Coast region."
Overall, Texas energy is undoubtedly a popular market that is attracting the attention of a diverse array of investors in the U.S. Further, if Sempra Energy succeeds in reviving Energy Future, the Texas company can serve as a beacon of hope to other energy firms that may encounter similar financial crisis.
Sources:
Sempra Energy Press Release and quote from Pres. Reed: http://sempra.mediaroom.com/index.php?s=19080&item=137336
Sempra Energy Business Profile: http://companies.bizjournals.com/profile/sempra/129952/
Warren Buffett Loses Oncor Deal to Sempra Energy: https://www.usatoday.com/story/money/2017/08/21/warren-buffett-sempra-energy-oncor-berkshire-hathaway-energy/585191001/