Summary
NextEra Energy, Inc. (NEE) announced on October 31, 2017, that it received a notice of termination for a previously agreed-upon merger agreement with Texas Transmission Holdings Corporation (TTHC). This agreement, dated October 30, 2016, involved NEE's subsidiary, WSS Acquisition Company, merging with TTHC, which holds a 20 percent interest in Oncor Electric Delivery Company LLC. The termination notice was issued by TTHC and certain primary stockholders, citing specific sections of the merger agreement. TTHC asserts it is owed a $72.3 million termination fee as a result of this action. However, NextEra Energy and its subsidiary dispute the validity of the termination and the claim for the termination fee. The company does not believe the termination is valid under the terms of the agreement, nor that the specified fee is payable. This development represents a significant shift in NEE's potential involvement with Oncor Electric Delivery Company and highlights a material dispute with TTHC regarding contractual obligations and financial penalties.
Key Highlights
- 1NextEra Energy (NEE) received a notice of termination for its merger agreement with Texas Transmission Holdings Corporation (TTHC).
- 2The merger agreement, dated October 30, 2016, involved NEE's subsidiary merging with TTHC, an entity with a 20% interest in Oncor Electric Delivery Company LLC.
- 3TTHC and certain primary stockholders issued the termination notice.
- 4TTHC claims a termination fee of $72.3 million is due from NEE as a result of the termination.
- 5NextEra Energy disputes the validity of the termination and the obligation to pay the termination fee.
- 6The dispute centers on the interpretation and application of specific sections within the merger agreement.