Sempra Energy and Oncor Electric Delivery Company LLC (Oncor) announced today that they have entered into agreements whereby they will acquire Sharyland Utilities, LP (Sharyland) and InfraREIT, Inc. (InfraREIT). InfraREIT owns and leases rate-regulated electric transmission assets in Texas. Sharyland is an electric transmission utility. Sempra Energy owns an approximate 80-percent ownership stake in Oncor.

As you may recall, last July Oncor and Sharyland agreed to swap assets in a transaction valued at approximately $400 million. Sharyland received approximately 258 miles of 345 kV transmission lines from Oncor, and Oncor received all of Sharyland’s distribution network and its approximately 54,000 retail delivery customers.

Under the recently announced agreement, Oncor will acquire 100 percent of the equity interests of InfraREIT, including all the limited-partnership units in its subsidiary InfraREIT Partners, LP, for approximately $1.275 billion.

Concurrently, Sempra Energy will acquire a 50-percent limited-partnership interest in a holding company that will own Sharyland for approximately $98 million. The other 50% of the holding company will be owned by entities controlled by Hunter L. Hunt (founder and Chairman of Sharyland) and other members of the family of Ray L. Hunt.

Oncor to take possession of Sharyland Assets in Much of Texas

Upon closing, Oncor will own and operate all of Sharyland’s existing electric transmission assets located in Central Texas, West Texas, and the Texas Panhandle and South Plains. Sharyland will continue as an independent privately-held transmission utility, owned by the new holding company, and will own the transmission assets that it developed in South Texas.

“This transaction continues our long and productive relationship with Oncor and allows us to partner with Sempra Energy, who shares our passion for developing critical infrastructure in Texas,” said Hunt.

“Our investment in Sharyland is an excellent complement to our investment in Oncor and furthers our vision of becoming North America’s premier energy infrastructure company,” said Jeffrey W. Martin, CEO of Sempra Energy. “We look forward to working with Sharyland on developing new and better ways to serve consumers in Texas.”

The transactions will ultimately require the approval of the Public Utility Commission of Texas, as well as a vote of approval from the majority of InfraREIT shareholders, among other approvals. Assuming these approvals are obtained, Sharyland expects to close the transaction by mid-2019.

— Thomas Brocato and Patrick Dinnin

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