Fortis Inc. and ITC Holdings Corp. announced February 9 that they had entered into an agreement and plan of merger, pursuant to which Fortis will acquire ITC in a transaction valued at approximately US$11.3 billion. Following the acquisition, Fortis will be one of the top 15 North American public utilities ranked by enterprise value, with an estimated enterprise value of $42 billion (US$30 billion at the exchange rate at the time).
Under the terms of the transaction ITC shareholders will receive US$22.57 in cash and 0.7520 Fortis shares per ITC share. At yesterday's closing price for Fortis common shares and the US$/C$ exchange rate, the per share consideration represents a premium of 33% over ITC's unaffected closing share price on November 27, 2015 and a 37% premium to the unaffected average closing price over the 30 day period prior to November 27, 2015.
On a pro forma basis, the consolidated mid year 2016 rate base of Fortis would increase by approximately C$8 billion (US$6 billion) to approximately C$26 billion (US$18 billion), as a result of the acquisition. The closing of the acquisition is expected to occur in late 2016.
Fortis Inc. is a St. John's, Newfoundland and Labrador based international diversified electric utility holding company. It operates in Canada, the United States, Central America, and the Caribbean. ITC owns and operates high-voltage transmission facilities in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma, serving a combined peak load exceeding 26,000 megawatts along approximately 15,600 miles of transmission line.