Sempra's deal for Energy Future Holdings Corp, which owns 80% of Oncor, is valued at about $18.8 billion including debt, the San Diegobased company said in a statement dated August 20.
Buffett had banked on an acquisition of Oncor to bolster the energy business of his Berkshire Hathaway conglomerate. However, in response to Sempra's bid, Berkshire offered to allow Energy Future to keep an Oncor dividend, but the proposal fell short to cover the gap in price, the sources added. Hedge fund Elliott Management, which owns a significant portion of Oncor's debt, opposed Berkshire's takeover bid, saying it wasn't enough.
The deal came together in the wee hours Sunday night, just before Energy Future's bankruptcy judge was to decide Monday whether he would approve a lower offer from Berkshire.
Sources told Reuters earlier that Sempra had decided to make an offer for Oncor in the last three weeks, after seeing the opposition that Berkshire faced from Elliott.
"Elliott is supportive of the proposed Sempra transaction, which provides substantially greater recoveries to all creditors of Energy Future than the proposed Berkshire transaction", a spokesman for Elliott told Reuters. It expects the transaction to be completed in the first half of next year. The deal still needs the approval of the Public Utility Commission of Texas, U.S. Bankruptcy Court of Delaware, Federal Energy Regulatory Commission and the U.S. Department of Justice.
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Allen Nye, who is now Oncor's general counsel, will succeed Bob Shapard as the company's CEO. Allen Nye, now Oncor's general counsel, will succeed Shapard as Oncor CEO. Oncor serves 10 million customers across Texas through the state's largest power distribution and transmission system.
According to commentators, the development marked a reverse for Buffett, who avoids bidding wars for companies and had set sight on the company, two months ago, after two previous attempts by Energy Future to sell it were blocked by Texas regulators.