Entergy's transmission business to merge with ITC Holdings

Entergy Corp. (NYSE: ETR) plans to spin off its electric-transmission business and merge it with ITC Holdings Corp.

The Wall Street Journal reports that Entergy's electric-transmission business consists of about 15,700 miles of interconnected transmission lines in the Mid-South.

Entergy will separate its electric-transmission business into a newly formed unit called Mid South TransCo LLC, the article said. Mid South will then reportedly merge with a unit of ITC in an all stock, Reverse Morris Trust transaction. Entergy shareholders will hold a 50.1 percent share of the merged company and ITC shareholders will own the remaining 49.9 percent.

Entergy reportedly will receive about $1.78 billion from debt incurred in connection with the transaction, and this debt will be assumed by ITC at the close of the merger. Entergy plans to use most of the cash proceeds to retire debt, the article said.

The deal is expected to close in 2013.

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