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Warren Buffett bets big on power infrastructure with $9 billion Oncor deal

Warren Buffett bets big on power infrastructure with $9 billion Oncor deal

Headquartered in Dallas, Texas, Oncor is an electric transmission and distribution service provider that serves 10 million customers across Texas.

The transaction is expected to close in Q4, subject to closing conditions. That makes the Dallas-based power transmitter his largest buy since Precision Castparts a year ago for $32 billion.

Berkshire is the third company that will come before regulators in Texas to ask permission to purchase a utility they have highly guarded to date.

"Oncor is an excellent fit for Berkshire Hathaway, and we are pleased to make another long-term investment in Texas - when we invest in Texas, we invest big!" As TXU in 2007, it was the center of the largest leveraged buyout at that time, but the deal ended with a credit crisis.

In April, Texas regulators rejected a proposed $18 billion sale of Oncor to Florida-based NextEra Energy.

Buffett previously made a foray into the company by buying United States dollars 2 billion of high-yield bonds in 2007. Energy Future Holdings filed its $42 billion bankruptcy in 2014.

That caught up Mr. Buffett: He bought about $2 billion of Energy Future's debt, a decision that he said he had made without consulting his longtime business partner, Charles Munger. (NYSE:BRK.A)(NYSE:BRK.B) is another option for investors considering adding an actively managed portfolio of stocks which should continue to outperform for the foreseeable future. This deal would have an equity value of about $11.25 billion for Oncor.

Following completion of the deal, Shapard will be appointed executive chairman while Allen Nye will become Oncor's new chief executive. Elsewhere in Texas, Berkshire also owns McLane Co., Berkshire Hathaway Automotive, Star Furniture, Charter Brokerage, LiquidPower Specialty Products Inc. and Allie Beth Allman & Associates.

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