Buffett's Berkshire Nears a Deal to Buy Oncor--2nd Update

By Dana Mattioli and Nicole Friedman Features Dow Jones Newswires

Berkshire Hathaway Inc.'s energy business is nearing a deal to buy Oncor, one of the country's largest electricity transmissions businesses, according to people familiar with the matter.

Continue Reading Below

A deal by Warren Buffett's Berkshire Hathaway Energy Co. to take over Oncor could be announced as soon as Thursday, the people said.

The deal's financial terms couldn't be learned, but the total value is less than the $18.4 billion that NextEra Energy Inc. agreed to pay for Oncor in a deal with Energy Future Holdings Corp. in July 2016, according to a person familiar with the matter.

NextEra's deal for Oncor, widely regarded as Energy Future's crown jewel, stalled as regulators in Texas rejected the deal, saying it wasn't in the public interest. NextEra had been pursuing Oncor since 2014, seeking to add the stable, cash-producing company to its collection of energy businesses.

A deal for Oncor also would be the next step in one of the largest bankruptcy proceedings on record: Energy Future's $42 billion bankruptcy filed in 2014. Energy Future, formerly known as TXU, had been taken private in the biggest leveraged buyout on record, but it ran into trouble after energy prices quickly took a dive, eating into the profits of its power business.

Mr. Buffett has been on a buying spree of late. Last year, he closed his largest deal ever when he bought industrial company Precision Castparts Corp. for $32 billion. The billionaire investor also has joined forces with Brazilian private-equity firm 3G Capital Partners L.P. to help create a global food empire, merging Kraft and Heinz and attempting to buy consumer goods giant Unilever PLC.

Continue Reading Below

Berkshire held $96.5 billion in cash as of March 31, and Mr. Buffett told shareholders in May that he is eager to find spaces to spend it. Berkshire made two smaller investments last month, rescuing struggling Canadian mortgage lender Home Capital Group Inc. and buying a stake in real-estate investment trust Store Capital Corp.

Berkshire Hathaway Energy owns utilities across the Midwest and Western states as well as in Canada and the U.K. It is also a major investor in renewable power, especially wind.

Berkshire Hathaway Energy's chief executive, Greg Abel, is a leading candidate to succeed Mr. Buffett as chief executive of the parent company.

Write to Dana Mattioli at dana.mattioli@wsj.com and Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

July 06, 2017 14:41 ET (18:41 GMT)