Fortis moves to acquire ITC Holdings Group for US$11.3 billion
Fortis Inc. is a major force in gas and electric utilities throughout Canada, with several regional divisions under its own brand name along with such branches as Newfoundland Power and Maritime Electric. Fortis has also extended its reach south of the border with Caribbean Utilities, Arizona-based UNS Energy, and New York-based Central Hudson. Now the service is extending its reach even further into the United States, with the significant acquisition of ITC Holdings Group for C$26 billion (or US$11.3 billion).
ITC is a large utilities provider in its own right, owning and operating high-voltage transmission facilities throughout a majority of the Midwestern United States including Michigan, Iowa, Minnesota, Illinois, Kansas and Oklahoma. With the acquisition of ITC and its assets, Fortis becomes one of the top 15 largest North American public utilities with a valuation of C$42 billion (US$30 billion). Moreover, ITC shareholders will receive US$22.57 in cash plus 0.7520 Fortis shares for every ITC share as a part of the transaction.
This move keeps Fortis on track toward substantial growth and expansion. Meanwhile ITC states that this acquisition is in line with its own objectives of lowering costs for customers and investing in reliability and long-term growth.
"Fortis has grown its business through strategic acquisitions that have contributed to strong organic growth over the past decade—our performance in 2015 is a clear demonstration of the success of this strategy," said Mr. Barry Perry, President and Chief Executive Officer of Fortis, in a statement from the company. "The acquisition of ITC—a premier pure-play transmission utility—is a continuation of this growth strategy. ITC not only further strengthens and diversifies our business, but it also accelerates our growth."
"I am forever grateful for the hard work of the ITC employees in building this great company and look forward to a bright future of continued operational excellence supported by the Fortis platform," added Joseph L. Welch, ITC Chairman, President and CEO. "We also very much appreciate the longstanding support of our investors who will receive an attractive premium for their investment and will also benefit from the opportunity to participate in the upside of the combination, including future value creation and a growing dividend program."