July 7 (Reuters) - Warren Buffett's move to spend $9 billion on his largest energy sector acquisition reflects his long-standing drive to diversify his Berkshire Hathaway Inc and deepens his commitment to electricity as a means to boost profit.
Berkshire said on Friday that its Berkshire Hathaway Energy unit will buy a reorganized Energy Future Holdings Corp to get access to Oncor Electric Delivery Co, Texas' largest electricity transmission company.
The all-cash purchase reflects a bet by Buffett that he can do what two prior suitors could not: convince Texas regulators that a takeover is in the public interest and deserves approval.
"Oncor is a great company with similar values and outstanding assets," Buffett said in a statement on Friday, adding: "When we invest in Texas, we invest big!"
The purchase also increases the importance to Berkshire of Greg Abel, 55, Berkshire Hathaway Energy's chief executive. Investors widely consider him a top candidate to succeed Buffett, 86, at the Omaha, Nebraska-based parent's helm.
Neither Buffett nor Abel was immediately available for additional comment.
Based in Dallas, Oncor delivers power to more than 3.4 million homes and business over roughly 122,000 miles (196,000 km) of transmission and distribution lines. It posted $431 million of profit in 2016, and similar sums in the prior three years.
Buffett values such consistency, telling Berkshire shareholders in February that utilities generate "recession-resistant" earnings because they offer an "essential service" that generates "remarkably steady" demand.
Abel's unit has in recent years also deepened its commitment to renewable energy, including wind, entitling it to tax credits that help bolster Berkshire's balance sheet.
Berkshire Hathaway Energy typically generates nearly 10 percent of its parent's profit, contributing $2.29 billion to an overall $24.07 billion in 2016.
Oncor's takeover requires approval by Texas' Public Utility Commission, which in 2016 and 2017 scuttled bids by NextEra Energy Inc and privately held Hunt Consolidated Inc.
The commission is required by law to rule on Berkshire's bid within six months of receiving an application. A spokesman declined to comment on Berkshire's prospects.
Berkshire expects Friday's purchase to close in the fourth quarter, pending approvals by state and federal regulators, and the judge overseeing Energy Future's bankruptcy proceedings.
It said the transaction implies an equity value of about $11.25 billion for Oncor. Kirkland & Ellis, a law firm representing Energy Future, said the transaction's enterprise value was about $18.1 billion.
Energy Future was created from the $45 billion buyout in 2007 of the former TXU Corp by KKR & Co, TPG Capital Management and Goldman Sachs Group Inc's private equity arm.
The buyout was a bet that natural gas prices would rise, allowing for higher electricity prices. But natural gas prices plunged instead, and Energy Future went bankrupt in 2014.
Buffett previously made one foray into the company, buying $2 billion of high-yield bonds in 2007.
But he threw in the towel six years later, taking an $873 million pretax loss. He has called that investment "a major unforced error."
Buffett entered the energy sector in 2000 when he led a group to buy the Des Moines, Iowa-based utility MidAmerican Energy Holdings Co, later renamed Berkshire Hathaway Energy.
He has since expanded in the central and western United States, such as with the Oregon-based PacifiCorp and Nevada-based NV Energy utilities.
Berkshire has also forayed outside the country, including with the AltaLink electricity transmission company in Alberta, Canada and Northern Powergrid in Newcastle upon Tyne in England.
Such bets enabled Buffett to diversify Berkshire away from its longstanding focus on insurance and stock-picking.
Berkshire now owns more than 90 businesses as diverse as the BNSF railroad, Geico car insurance, Lubrizol chemicals and Dairy Queen ice cream.
Assuming the Oncor transaction closes, Oncor CEO Bob Shapard would become executive chairman, and be replaced by general counsel Allen Nye, under a previously announced plan. (Reporting by David French, Jessica DiNapoli and Jonathan Stempel in New York; and Kanishka Singh and Subrat Patnaik in Bengaluru; Editing by Amrutha Gayathri and Bill Rigby)