Fortis Inc. and GIC Private Limited announced today the closing of the about $11.3 billion acquisition of Novi, Michigan-based ITC Holdings Corp.
Fortis is now among the top 15 North American regulated investor-owned utilities ranked by enterprise value. Its 8,000 employees serve customers at utility operations in five Canadian provinces, nine U.S. states and three Caribbean countries.
The Federal Energy Regulatory Commission sets rates for about 30 percent of the corporation's regulated rate base. Rate setting for the balance of the corporation's regulated rate base is largely governed by state and provincial bodies in the jurisdictions in which the Fortis utilities operate.
"Today is a special day for Fortis and ITC," said Barry Perry, president and CEO of Fortis. "Our teams have worked tirelessly over the past year to make this acquisition happen, and we couldn't be more pleased to welcome ITC to the Fortis group of utilities. The ITC acquisition is the largest in the history of Fortis, dramatically increasing our North American footprint. It establishes significant scale and a new platform in the electric transmission sector."
"This is a great day for our customers, employees and our local communities, and the culmination of this transaction is a major milestone for ITC," said Joseph L. Welch, chairman, president and CEO of ITC. "We remain dedicated to our service territory while now having the benefit of additional Fortis resources to better serve our customers."
Welch said, "I am grateful for the hard work of the ITC employees and management team in building this great company and look forward to a bright future of continued operational excellence. ITC's leadership team is well positioned for success as a part of the Fortis portfolio."
Rhys Evenden, Head of Infrastructure for North America at GIC, said, "We applaud the efforts of our combined teams and we look forward to a successful long-term partnership."
As part of the completion of the transaction, Joseph L. Welch announced his retirement, effective November 1, 2016, as president and CEO of ITC. Welch will remain chairman of the ITC board of directors. Linda H. Blair will succeed Welch as president and CEO of ITC. Blair currently serves as executive vice president and chief business unit officer and has been a member of ITC's leadership team since its inception. Fortis expects to nominate Welch for election to the Fortis board of directors at its 2017 annual general meeting.
"ITC will continue to focus on delivering value for customers through modernizing the electrical infrastructure of the United States and other areas," Blair said. "I am confident in our leadership team and the ability to execute on our strategic goals and our long-term strategy of investing in transmission opportunities to improve reliability, expand access to power markets, allow new generating resources to interconnect to our transmission systems and lower the overall cost of delivered energy for customers."
"I am pleased Joe will remain involved through his chairmanship of the ITC board of directors and his participation on the Fortis board, and look forward to working with Linda and the rest of the ITC management team," said Perry.
Following a short transition period, the ITC board of directors will be comprised of a majority of independent directors, as well as representatives from Fortis and GIC.
As previously announced, ITC shareholders will receive $22.57 in cash and 0.7520 Fortis common shares per share of ITC common stock. Former ITC shareholders who continue to hold Fortis common shares on the upcoming record date will be entitled to Fortis' next quarterly cash dividend of 40 cents per Fortis common share.
This dividend was declared by the Fortis board of directors on September 27, 2016 and is payable to all Fortis shareholders of record at the close of business on November 18, 2016. The dividend to Fortis shareholders will be paid on December 1, 2016.