> Warren Buffett Blog: Berkshire acquisition of Oncor

Tuesday, July 11, 2017

Berkshire acquisition of Oncor

Berkshire Hathaway Energy, agreed to acquire Oncor for $18.1 billion, including debt. In recent years, two other sales of the state’s largest regulated utility were proposed, only to be derailed by the Texas Public Utility Commission. This case is different, in part because Berkshire and Oncor had the foresight to win over stakeholders in advance. Groups representing cities, industries and consumers support the deal. Even the PUC staff director endorsed the takeover.

For decades, Buffett has invested in strong companies with strong managers, and let them continue doing what they do best. His deals aren’t driven by synergies or financial engineering, which are common in other acquisitions. Buffett explained his philosophy in an owner’s manual for investors, which was first written in 1996 and later updated.

“We subcontract all of the heavy lifting in this business to the managers of our subsidiaries,” Buffett wrote, referring to himself and partner Charlie Munger.