Chadbourne Advises NextEra Energy on US$18.4 Billion Transaction to Acquire Texas Utility

Chadbourne & Parke LLP advised NextEra Energy, one of the largest electric power companies in North America, on its agreement to acquire Energy Future Holdings (EFH) and EFH’s stake in Oncor Electric Delivery Company (Oncor) in a deal worth US$18.4 billion.

In this transaction, NextEra will acquire 100 percent of the equity of reorganized EFH, including EFH’s approximately 80 percent indirect interest in Oncor, a transmission and distribution utility company that provides power to more than 10 million consumers in northeast and west Texas. EFH, an electric utility company headquartered in Dallas, Texas, filed for bankruptcy protection in April 2014 after being saddled by debt in the largest leveraged buyout in US history. As part of the transaction, NextEra will pay US$9.5 billion primarily for the repayment of debt at EFH and its subsidiaries to enable EFH to exit Chapter 11.

The acquisition requires approval from the US Bankruptcy Court for the District of Delaware, as well as approval from the Public Utility Commission of Texas, approval from the Federal Energy Regulatory Commission, as well as approval from competition regulators.

Partner Howard Seife, chair of the firm’s Bankruptcy and Financial Restructuring Group, led the team from Chadbourne, which included partners William Greason, William Cavanagh, Charles Hord, Andrew Rosenblatt, David LeMay, Marjorie Glover, Richard Leder, counsel Christy Rivera, and associate Eric Daucher. Valuable assistance was also provided by partners Robin Ball, and Marian Baldwin Fuerst, counsel Francisco Vazquez and Joe Giannini, senior counsel Carey Child, associates Margaret Weil, Michael Masri, Patrick Narvaez, Daniel Maland, Tae Sang Yoo, Patrick Dorime, Ross Shepard, Eric Zember, and Jacob Laksin, law clerks Vincent El Hayek and Alexander Cohen, and case manager David Bava. 

The transaction, which has been approved by the boards of directors of both NextEra Energy and EFH, is expected to be completed in the first quarter of 2017. Chadbourne previously represented NextEra in connection with the sale of its equity interests in White Pine Hydro Investments, which indirectly owned 351 MW of hydro generation-related assets in Maine and New Hampshire.

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