Warren Buffett Buys Electric-Utility Giant Oncor for $9 Billion

Quaker Capital Investments LLC Continues to Hold Position in Berkshire Hathaway Inc. (NYSE:BRK)

Warren Buffett's Berkshire Hathaway is reportedly close to buying an electric-utility giant

Based in Dallas, Texas, Oncor is a regulated electric transmission and distribution service provider. That makes the Dallas-based power transmitter his largest buy since Precision Castparts past year for $32 billion.

If approved, the deal could help deliver Energy Future Holdings, Oncor's parent company and Texas' largest power conglomerate, from one of the largest corporate bankruptcies in American history.

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.

Morgan Stanley assumed coverage on shares of Berkshire Hathaway Inc. But natural gas prices plunged instead, and Energy Future went bankrupt in 2014.Buffett previously made one foray into the company, buying $2 billion of high-yield bonds in 2007.But he threw in the towel six years later, taking an $873 million pre-tax loss. (NYSE:BRK.A), has agreed to acquire Energy Future Holdings Corp. for $9 billion in cash.

He added that regulators would be appreciative of the ownership of the company and said that Oncor would have capital that was virtually unlimited.

That praise has also raised the standing of Mr. Abel within the Berkshire universe, with analysts and Buffett watchers regarding him as a leading candidate to replace Mr. Buffett as Berkshire's chief executive when the time comes.

Energy Future was created from the United States dollars 45 billion buyout in 2007 of the former TXU Corp by KKR & Co, TPG Capital Management and Goldman Sachs Group Inc's private equity arm.

The deal implies an equity value for Oncor at $11.25 billion, according to Berkshire's release, and Oncor's enterprise value has been pegged above $18 billion.

Upon closing of the transaction, Shapard will become executive chairman of the Oncor's board, while Allen Nye will take the position of CEO of Oncor. Last year, the state government rejected a bid by the Hunt family, a force in the state's oil and power industries.

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