Atmos Energy Corp. said Thursday it has agreed to acquire TXU Corp.'s Texas natural gas transmission and distribution unit for $1.93 billion in cash.
Dallas-based Atmos said it expects the purchase of TXU Gas to close in the first quarter of fiscal 2005 and add 5 to 10 cents per share to that year's earnings. Atmos plans to issue $500 million to $600 million of new equity to help fund the transaction, with remaining funds needed raised through debt sales.
TXU, also based in Dallas, in a separate news release said the sales price of TXU Gas is on par with its book value.
The deal is the latest in a series of asset sales by TXU, a major power company scrambling to raise cash and restore its financial strength. TXU, like many other U.S. utility companies, in recent years racked up losses from failed investments in unregulated businesses and overseas assets.
TXU predecessor Texas Utilities, the state's largest power utility, merged with ENSERCH, the state's biggest natural gas utility, in 1997. Among ENSERCH's assets were Lone Star Gas, which was renamed TXU Gas.