Fortis proposes friendly US$11.3B deal to acquire ITC

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.

See Full Article

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.

By David Paddon in Toronto



Advertisements

Latest Economic News

  • France pledges $30 million for wartime heritage protection

    Economic CTV News
    ABU DHABI, United Arab Emirates -- France committed $30 million toward protecting cultural heritage sites during wartime on Saturday, a first step in the creation of an international fund aimed at preventing destruction like that carried out by Islamic State militants. Source
  • The best and worst ways to budget for the holidays

    Economic CBC News
    Presents. Parties. Travel. The holidays can drain our energy, and our bank accounts — even if we try our best to prevent it. We checked in with some of Canada's top personal finance experts for their best budget tips, but also their biggest blunders, because even the smartest money-handlers know holiday pressure can lead to poor decisions. Source
  • Angry Air Miles collectors demand back points they rushed to use on 'junk'

    Economic CBC News
    On Thursday, Air Miles cancelled its controversial expiry policy. But the move is only fuelling the fury for many collectors who used their points on stuff they didn't really want to beat the clock. Source
  • Death threats and abuse for woman leading Brexit court fight

    Economic CTV News
    LONDON -- Gina Miller is paying the price for going to court. The financial entrepreneur says she has received death threats and racial and sexual abuse since she won a High Court ruling forcing the British government to seek Parliamentary approval before leaving the European Union. Source
  • Air Miles rep: 'Options' may exist for panic redeemers

    Economic CTV News
    Air Miles Canada may have thought abandoning its unpopular expiration policy would calm the cardholder backlash from those who rushed to spend miles, but were frustrated by full flights, sold out merchandise, and long customer service delays. Source
  • Irving mill faces steep fines after being charged with polluting St. John River

    Economic CTV News
    SAINT JOHN, N.B. -- Irving Pulp and Paper is facing 15 counts of polluting the St. John River at its mill near the Reversing Falls tourist attraction. An Environment Canada spokesman says Irving has been charged under federal Fisheries Act provisions on the deposit of harmful substances into fish-bearing water. Source
  • Costco investigated over allegations pharmacy directors accepted kickbacks for certain brands

    Economic CBC News
    Costco is being investigated by Ontario's Ministry of Health for its compliance with the province's legislation on selling pharmaceutical and over-the-counter drugs. The health ministry investigation comes after the Ontario College of Pharmacists (OCP) announced it would hold disciplinary hearings for two Costco pharmacy directors because of allegations that they accepted Source
  • Costco to be investigated by government over compliance with drug-selling rules

    Economic CTV News
    TORONTO -- Costco is being investigated by Ontario's Ministry of Health for its compliance with the province's legislation on selling pharmaceutical and over-the-counter drugs. The health ministry investigation comes after the Ontario College of Pharmacists announced it would hold disciplinary hearings for two Costco pharmacy directors because of allegations that they accepted kickbacks for stocking certain brands. Source
  • United Airlines will pay US$2.4 million to settle with SEC

    Economic CTV News
    WASHINGTON -- The parent company of United Airlines will pay US$2.4 million to settle civil charges by securities regulators over flights that were started to help an official who oversaw one of the airline's hub airports. Source
  • 4 of world's biggest cities have plans to get diesel off their streets

    Economic CBC News
    Four of the world's largest and most polluted cities have decided to ban diesel cars and trucks from their streets by 2025. The mayors of Paris, Mexico City, Madrid and Athens announced the commitment in Mexico City on Friday at the C40 Mayors' Summit, a meeting of city leaders. Source