As per the transaction terms, shareholders of ITC will receive $22.57 in cash and 0.7520 Fortis shares for each ITC share.
In particular, ITC shareholders will receive approximately $6.9bn in Fortis common shares while Fortis will assume approximately $4.4bn of consolidated ITC debt.
Fortis president and CEO Barry Perry said: "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."
ITC, which owns and operates 15,600 miles of transmission lines and facilities in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma, US, will become the subsidiary of Fortis upon completion of deal.
It will also own approximately 27% of the common shares of Fortis.
ITC president and CEO Joseph Welch said: "This transaction accomplishes our objectives by better positioning the company to have a higher level of focus on pursuing our long-term strategy of investing in transmission opportunities to improve reliability, expand access to power markets and allow new generating resources to interconnect to transmission systems and lower the overall cost of delivered energy for customers."
Scheduled to be completed in late 2016, the transaction is subject to satisfaction of customary closing conditions, and certain regulatory and federal approvals.
The acquisition is a part of Fortis’ effort to achieve 6% average annual dividend growth target through 2020.
Perry added: "The acquisition of ITC is in alignment with our business model and acquisition strategy, providing meaningful accretion, and creating a unique, highly diversified, low-risk regulated energy transportation platform.
"The predictable returns of a transmission business, with no commodity or fuel exposure, are very compelling."
Image: ITC owns and operates 15,600 miles of transmission lines and facilities in the US. Photo: courtesy of duron123/FreeDigitalPhotos.net.
