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21 March 2007 - Kohlberg Kravis Roberts (KKR) has threatened to pull out of its proposed $45bn purchase of TXU Corporation if lawmakers impose new regulation to impede the sale of the Texan utility.

Lawmakers are considering legislation that could slow or derail the deal by making TXU smaller and forcing it to seek approval for the sale from the Public Utility Commission (PUC). Henry Kravis, the founding partner of KKR, said if lawmakers impose such barriers, KKR and Texas Pacific Group might walk away from the biggest private buyout ever.

"This is a large commitment for KKR and TPG," Kravis said. "We did it with the full understanding that the rules were transparent; that the PUC had certain authority and had we known that the rules would be changed, I think that would have changed our thinking whether we would have made an offer."

Kravis said if the sale fails, TXU would not make the environmental concessions and rate cuts that his group has promised. A bill to let the PUC review the sale of an electric utility has passed the Senate and is pending in the House.

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