Sempra Energy to acquire ownership interest in Oncor

Sempra Energy  today announced an agreement to acquire Energy Future Holdings Corp., the indirect owner of 80 percent of Oncor Electric Delivery Company, LLC, operator of the largest electric transmission and distribution system in Texas.

Under the agreement, Sempra Energy will pay approximately US$9.45 billion in cash to acquire Energy Future and its ownership in Oncor, while taking a major step forward in resolving Energy Future's long-running bankruptcy case. The enterprise value of the transaction is approximately $18.8 billion, including the assumption of Oncor's debt.

The transaction is expected to be accretive to Sempra Energy's earnings beginning in 2018.

Debra L. Reed, chairman, president and CEO of Sempra Energy, said: 

"Both Sempra Energy and Oncor share more than 100 years of experience operating utilities that deliver safe, reliable energy to millions of customers. With its strong management team and long, distinguished history as Texas' leading electric provider, Oncor is an excellent strategic fit for our portfolio of utility and energy infrastructure businesses. We believe our agreement with Energy Future will help ensure that Texas utility customers continue to receive the outstanding electric service they have come to expect from Oncor and provide stability to Oncor's nearly 4,000 employees."

"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," said Reed.

Sempra Energy expects to fund the US$9.45 billion transaction using a combination of its own debt and equity, third-party equity, and US$3 billion of expected investment-grade debt at the reorganized holding company. Sempra Energy has received financing commitments from RBC Capital Markets and Morgan Stanley. Sempra Energy expects its equity ownership after the transaction to be approximately 60 percent of the reorganized holding company.

As a result of the transaction, it is anticipated that Oncor's underlying financial strength and credit ratings will improve. Sempra Energy also will maintain the existing independence of Oncor's board of directors, which has protected Oncor and its customers during the ongoing Energy Future bankruptcy.

As part of the transaction, Sempra Energy has committed to support Oncor's plan to invest US$7.5 billion of capital over a five-year period to expand and reinforce its transmission and distribution network.