Berkshire Hathaway's $9 billion deal for the electricity transmission company Oncor is facing a challenge.
NextEra's deal for Oncor stalled as regulators in Texas rejected the deal, saying it wasn't in the public interest. That makes the Dallas-based power transmitter his largest buy since Precision Castparts a year ago for $32 billion. Including debt, the deal has an enterprise value of roughly $18bn, The Wall Street Journal reports. Energy Future's two unregulated units, Luminant and TXU Energy, were spun out into a new company, Vistra Energy, in the fall. Both saw pushback from consumer advocates - those concerned about the deals' impact on Oncor's financial health, independence and rates it charges - and failed to gain full approval from the state's Public Utility Commission. A buyout attempt previous year backed by the Ray Hunt family of Dallas also faltered.
Mr. Buffett has long hailed the performance of Berkshire Hathaway Energy, whose collection of utilities delivers power to 11.6 million customers across the Midwest and the West, as well as in Britain and Canada.
Under the terms of the proposed transaction, Oncor's chief executive, Bob Shapard, would become the business's executive chairman. Buffett said in a statement.
Berkshire Hathaway Inc. shares were trading at $171.15 per share on Friday afternoon, up $0.95 (+0.56%).
Berkshire Hathaway suggests this deal will be different. The acquisition, which requires approvals from state, federal and bankruptcy court, is expected to be completed in the fourth quarter of this year.