Fortis to buy U.S. electric transmission company ITC in US$11.3 billion deal

Fortis Inc. has a friendly US$11.3-billion deal to buy U.S. electric transmission company ITC, an acquisition that extends the Newfoundland-based utility company's already vast reach south of the border.

ST. JOHN’S, N.L. — Fortis Inc. has a friendly US$11.3-billion deal to buy U.S. electric transmission company ITC, an acquisition that extends the Newfoundland-based utility company’s already vast reach south of the border.

The proposed agreement announced Tuesday — which requires various approvals — includes US$6.9 billion in cash and stock and US$4.4 billion in assumed debt. Shareholders in ITC would have a 27 per cent stake in the combined company.

Fortis president and CEO Barry Perry said the acquisition of the Michigan-based company strengthens its business in the United States, giving it access to more than 25,000 kilometres of transmission lines.

“This deal has it all for Fortis and was a bull’s-eye for us when we were looking at how it fit our company,” Perry said in a conference call with analysts.

Although Fortis (TSX:FTS) has a low public profile, it has expanded beyond its base as owner of Newfoundland Power and owns extensive operations across North America.

ITC chairman Joseph Welch, who is also the company’s president and CEO, said the U.S. will need “a massive amount” of transmission infrastructure over the coming years and Congress has approved incentives to spur investments in such initiatives.

“As the United States shifts itself to more of a clean-air energy technology, you’re going to see that our footprint is actually … where most of the regional development will be — especially for wind development,” Welch said.

Fortis is offering US$22.57 in cash and 0.7520 of a Fortis share for each ITC share — totalling about US$44.90 per share, or 33 per cent more than before ITC announced on Nov. 30 that it was reviewing its strategic alternatives.

Under the deal, Fortis adds to its holdings ITC’s high-voltage transmission lines in seven states — Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma. As part of the transaction, Fortis will seek a listing on the New York Stock Exchange after the deal closes, which is anticipated to be in late 2016.

Its Canadian assets include FortisBC, which provides power including natural gas, electricity, propane and alternative energy to approximately 1.1 million customers in more than 135 communities in British Columbia. It also has FortisAlberta, which has 530,000 customers, and FortisOntario, which has 64,000 customers.

In addition to Newfoundland Power, the St. John’s-based company, which can trace its roots to the formation of the St. John’s Electronic Company in 1885, also owns Maritime Electric in P.E.I., UNS Energy in Arizona, Central Hudson in New York state and other holdings in the Caribbean.

In the U.S., Fortis owns Arizona-based UNS Energy with 658,000 electricity and gas customers and the Central Hudson transmission and distribution company in New York state. It also has a 60 per cent interest in a company that provides electricity on Grand Cayman in the Caribbean.

Just Posted

Sunny weather improves farmers’ prospects

A harvester kicking up dust. It’s a picture that will bring a… Continue reading

Rural transit pilot project being considered

Penhold, Innisfail and Red Deer County councils to decide whether to go ahead with project

Red Deer fire station up for sale

Home sweet home at Fire Station 4

Most surveyed Innisfail residents give urban chickens the thumbs up

Town of Innisfail will discuss whether to allow backyard chickens on Monday

‘Mom I’m in trouble:’ Canadian, Brit face 10 years in jail for alleged graffiti

GRANDE PRAIRIE, Alta. — The mother of a Canadian who was arrested… Continue reading

Coyote on the prowl near Penhold

This coyote was out on the prowl in a field just west… Continue reading

Sky’s the limit as Calgary opens testing area for drones and new technologies

CALGARY — The sky’s the limit as the city of Calgary opens… Continue reading

Hi Mickey, ‘Bye Mickey: 6 Disney parks on 2 coasts in 1 day

ORLANDO, Fla. — Heather and Clark Ensminger breathed sighs of relief when… Continue reading

Court weighs ‘Apprentice’ hopeful’s suit versus Trump

NEW YORK — President Donald Trump’s lawyers hope to persuade an appeals… Continue reading

StarKist admits fixing tuna prices, faces $100 million fine

SAN FRANCISCO — StarKist Co. agreed to plead guilty to a felony… Continue reading

Annual pace of inflation slows to 2.2 per cent in September: Statistics Canada

OTTAWA — The annual pace of inflation slowed more than expected in… Continue reading

Jury finds Calgary couple guilty in 2013 death of toddler son

CALGARY — A jury has convicted a Calgary couple in the death… Continue reading

Most Read