US-based Sempra Energy has agreed to acquire Energy Future and its 80% ownership in Oncor.
Headquartered in Texas, Oncor operates one of the largest electric transmission and distribution systems in the US. The enterprise value of the deal is around $18.8bn, which includes the assumption of Oncor’s debt.
The agreement is also expected to resolve Energy Future’s long-running bankruptcy case.
In addition, Sempra Energy has committed to support Oncor’s plan to invest $7.5bn over a five-year period to expand and improve its transmission and distribution network.
Subject to various customary closing conditions, the transaction is expected to be closed by the first half of 2018.
Sempra Energy chairman, president, and CEO Debra Reed said: “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 US Gulf Coast region.”
Sempra expects to fund the acquisition through a combination of its own debt and equity, as well as third-party equity and other sources.