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TXU's $32B Buyout

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From the Statesman:

TXU Corp., Texas' largest electricity producer, said Monday it has agreed to be sold to a group of private-equity firms for about $32 billion in what would be the largest private buyout in U.S. corporate history if shareholders and regulators go along.

Kohlberg Kravis Roberts & Co. and Texas Pacific Group led a group that included Goldman Sachs & Co. and three other Wall Street firms that will pay $69.25 per share for TXU. They will also assume about $13 billion in debt.

The firms won support for the buyout from some environmentalists who have criticized TXU by agreeing to sharply scale back TXU's controversial $10 billion plan to build 11 new coal-fired power plants that would produce tons of new greenhouse gas emissions.

They also agreed to cut electricity prices 10 percent, which they said would save TXU residential customers more than $300 million per year, and limit prices until September 2008.

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Alex Brown said…
So I guess the big question now is what they are gonna do with the plans for new nuclear units? Does their descision to drastically reduce the number of new coal units mean that they will seek other forms of generation more agressively (preferably nuclear)? Certianlly given the considerable growth in Texas' populations some new generation will be needed in the near future, I wonder where the new owners expect it to come from?
February 26, 2007 at 2:41 PM
Anonymous said…
I don't think they have any plans to build either coal or nuclear. I think they will hold the generating assests for a few years and then sell them off, either piecemeal or all at once,at a large profit. KKR and Texas Pacific were the major players in the take over of Texas Genco,the generating portion of the old Houston lighting and Power. They bought the company for about $3.5 billion, held it for two years and sold for $5.4 billion. I think they have the same plans for TXU.
February 26, 2007 at 7:19 PM
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