DALLAS, Oct. 10 /PRNewswire-FirstCall/ -- TXU Corp. (NYSE: TXU) today
announced the completion of its merger agreement with Texas Energy Future
Holdings Limited Partnership (TEF). TEF is led by a group of investors
including Kohlberg Kravis Roberts & Co. (KKR), Texas Pacific Group (TPG)
and Goldman Sachs Capital Partners. TXU shareholders overwhelmingly
approved the merger at the company's Annual Meeting on September 7, 2007.
With the completion of the merger, TXU Corp. has changed its name to
Energy Future Holdings Corp. Shares of TXU common stock, which are listed
on the New York Stock Exchange and the Chicago Stock Exchange, ceased
trading at close of market today and will be delisted. Under the terms of
the merger agreement, TXU shareholders are entitled to $69.25 in cash for
each share of TXU common stock held. Lehman Brothers, Citigroup and Morgan
Stanley became equity investors at closing.
Completion of the merger agreement marks the final step in the
transformation into a privately held company that is already delivering
price cuts, price protection and low-income customer benefits, as well as
taking actions to provide affordable power for years to come. In addition,
the company will seek to achieve top environmental performance in the
industry and greater involvement and dialogue with environmental,
government and community leaders.
"Our investment horizon allows the board, management and employees to
formulate and implement a long-term strategy to meet customer needs and to
respond to the significant energy challenges in Texas," said Marc
Lipschultz of KKR.
Since the announcement of the merger transaction on February 26, 2007,
TEF's plans for the company's new direction have received support from
consumer groups, environmental groups, labor unions, business leaders and
elected officials from communities across Texas.
"We have maintained open and productive dialogues with legislators,
regulators, customers and consumer advocates. Together, we are proud to be
part of a transformation that will benefit -- and in fact already is
benefiting -- customers and residents of the state of Texas," said Michael
MacDougall of TPG.
With the close of the transaction, Donald L. Evans becomes
non-executive chairman of Energy Future Holdings Corp. Evans previously
served as U.S. Secretary of Commerce for four years under President George
"We are excited about the opportunities that the completion of this
merger provides. This transaction is not only good for TXU shareholders,
but also for employees, customers and residents across the state of Texas,"
said Evans. "I look forward to working with management and employees to
demonstrate our commitment to being a leading corporate citizen, to
implementing stronger environmental policies and to providing reliable and
As non-executive chairman, Evans will lead the company's board of
directors, which as previously announced will include: William Reilly,
Chairman Emeritus of the World Wildlife Fund and former EPA Administrator;
Lyndon Olson, former U.S. Ambassador to Sweden; James Huffines, Chairman of
the Central Region Plains Capital Bank; and Kneeland Youngblood of Pharos
Capital Group, LLC. Former U.S. Secretary of State James A. Baker, III will
serve as advisor to the company.
"This company and its employees are ready for the next step. We look
forward to implementing additional separation of our three businesses so
each can focus on the distinct customers they serve," said Tom Baker,
Vice-Chairman of TXU Corp. who will transition to Chairman Emeritus of
Energy Future Holdings Corp.
As previously announced, with the successful completion of the
transaction, C. John Wilder has resigned as TXU Corp. Chairman and CEO.
Since his arrival in February 2004, Wilder led the company to substantial
performance improvements including: outstanding shareholder returns; a
successful business turnaround; and a major restructuring of the operations
and growth program.
"I am proud of what TXU has become and confident that the company is in
good hands. Because of the hard work of TXU employees, these businesses are
operating at safe, high-performance levels across many dimensions," said
Evans concluded, "I'd like to thank John Wilder and the outgoing board
of directors for their years of service to the company. They leave a
company of outstanding men and women, dedicated to excellence in customer
service and energy reliability. We wish them well in their future
Three Separate and Distinct Companies
Energy Future Holdings Corp., a holding company, will continue the
transition of its businesses into three separate and distinct business
units with separate boards, management teams, and headquarters.
Each business will operate independently under the leadership of a CEO:
-- Jim Burke will serve as CEO of TXU Energy, a competitive electricity
-- Mike Greene will serve as CEO of Luminant, a competitive power
generation business, including mining, wholesale marketing and
trading, and construction; and
-- Bob Shapard will serve as CEO of Oncor, a regulated electric
distribution and transmission business.
To maintain smooth ongoing operations, current business unit management
and organizational structures will remain in place at least through a
transition period, which is expected to be complete in the first half of
2008. Beyond the further separation of the three primary businesses, most
employees will experience few differences in their day-to-day jobs. The
transition will be seamless to customers.
Headquarters for each of the three businesses will remain in the
Dallas/Fort Worth area.
As a result of the close of the transaction, TXU Energy will reduce
retail prices by an additional 5%, resulting in a total 15% price reduction
in 2007 for residential customers who had not already chosen one of TXU
Energy's lower-priced or environmentally friendly options. With this
additional reduction TXU Energy will continue to offer the lowest prices of
any incumbent competitive retailer in Texas. The value of TXU Energy's
lower prices, innovative range of products to meet customer needs, and
focus on customer service have contributed to an increase in customer count
over the past few months.
$150 Million Commitment to Low-Income Assistance
TEF and TXU Energy have announced the creation of TXU Energy Access, a
comprehensive program representing a commitment of more than $150 million
over 5 years to assist low-income customers.
As part of the transaction, TEF made a range of commitments to
strengthen environmental policies, make significant investments in
alternative energy and institute corporate policies tied to climate
stewardship. Those efforts helped earn the endorsement of Environmental
Defense and the Natural Resources Defense Council, two of the nation's
largest and most respected environmental organizations.
In keeping with the commitment to reduce the number of planned
coal-fueled generation units from 11 to three, the eight air permit
applications will be withdrawn by Luminant. The eight air permit
applications were suspended shortly following the announcement of the
In addition, Energy Future Holdings Corp. will create a Sustainable
Energy Advisory Board comprised of individuals who represent the following
interests: the environment; customers; Texas economic development; and
ERCOT reliability standards. Board member William Reilly, Chairman Emeritus
of the World Wildlife Fund and former Administrator of the U.S.
Environmental Protection Agency, will lead the effort to make climate
stewardship central to corporate policies.
In advance of the close of the transaction, Oncor and TEF reached an
agreement in principle with the key parties that would resolve all
outstanding issues in the Public Utility Commission of Texas (PUC) review
under Public Utility Regulatory Act Section 14.101 related to the change in
control of Oncor. The agreement includes provisions under which the PUC
would dismiss Oncor's pending rate case. The agreement is subject to
approval by the PUC.
Following the close of the acquisition of TXU Corp. and as previously
disclosed, TEF will sell a twenty percent stake in Oncor. Now that the
acquisition is complete, the minority stake sale process will commence
shortly and is an important element of the investor group's plan. The sale
of a twenty percent minority stake in Oncor has long been part of TEF's
plan to enhance Oncor's independence and separation from TXU Corp., TXU
Energy and Luminant. The purchaser of the twenty percent stake will not be
affiliated with any of the companies owned by TXU Corp. or the parties
involved in this transaction, and will have meaningful representation on
the Oncor board of directors.
In addition, Oncor plans to secure all of its currently existing
long-term debt. This does not include the $800 million principal amount of
floating rate senior notes that were redeemed upon completion of the merger
as required by the terms of the notes. Oncor's $2 billion credit facility
is also secured.
Shareholders of record of TXU Corp. common stock who have stock
certificates will receive instructions and a letter of transmittal from
Mellon Investor Services LLC, the disbursing agent for the merger,
concerning how and where to forward stock certificates for exchange and
payment. Shareholders of record whose shares are held in book entry
(electronic) form will receive a check from Mellon without needing to take
any action. For shares held in "street name" through a broker, bank or
other nominee, shareholders need not take any action to have shares
exchanged for cash through the broker, bank or other nominee. For street
name shareholders, questions about the receipt of compensation for shares
should be directed to the appropriate broker, bank or other nominee. For
all other questions regarding the exchange of TXU Corp. common stock
shares, please call Mellon Investor Services LLC toll free at
About Energy Future Holdings
Energy Future Holdings Corp., formerly named TXU Corp., is a
Dallas-based energy holding company, with a portfolio of competitive and
regulated energy subsidiaries, primarily in Texas, including TXU Energy,
Luminant and Oncor. TXU Energy is a competitive retailer that provides
electricity and related services to 2.1 million electricity customers in
Texas. Luminant is a competitive power generation business, including
mining, wholesale marketing and trading, construction and development
operations. Luminant has over 18,300 MW of generation in Texas, including
2,300 MW of nuclear and 5,800 MW of coal-fueled generation capacity.
Luminant is also the largest purchaser of wind-generated electricity in
Texas and fifth largest in the United States. Oncor is a regulated electric
distribution and transmission business that uses superior asset management
skills to provide reliable electricity delivery to consumers. Oncor
operates the largest distribution and transmission system in Texas,
providing power to three million electric delivery points over more than
101,000 miles of distribution and 14,000 miles of transmission lines. Visit
http://www.txucorp.com for more information.
Texas Energy Future Holdings Limited Partnership is the holding company
formed by Kohlberg Kravis Roberts & Co., Texas Pacific Group and other
investors to acquire TXU Corp.
Forward Looking Statements
This release contains forward-looking statements, which are subject to
various risks and uncertainties. Discussion of risks and uncertainties that
could cause actual results to differ materially from management's current
projections, forecasts, estimates and expectations is contained in Energy
Future Holdings Corp. or TXU Corp.'s filings with the Securities and
Exchange Commission. Specifically, TXU Corp. makes reference to the section
entitled "Risk Factors" in its annual and quarterly reports. In addition to
the risks and uncertainties set forth in the SEC reports or periodic
reports, the proposed transactions described in this release could be
affected by, among other things, the occurrence of any event, change,
market conditions or other circumstances that could prevent TEF from
completing the sale of the 20 percent interest in Oncor.