Canadian utility Fortis Inc said it will buy CH Energy Group Inc for about $1 billion in cash, to enter the US state-regulated electric and gas distribution business that assures stable return.
Fortis, which will also assume $500 million debt, will pay CH Energy shareholders $65 a share, representing a premium of 11 per cent over on Friday’s close.
Last November, Fortis had said it was looking to expand in the United States and could have as many US assets as Canadian within 10 years.
Fortis, which is being advised by Bank of America Merrill Lynch, said the deal will immediately add to its earnings, excluding one-time transaction costs.
“CH Energy Group’s regulated utility operations in New York State are similar to our regulated utility operations in Canada,” Fortis’ Chief Executive Stan Marshall said in a statement.
Poughkeepsie, New York-based CH Energy’s main business, Central Hudson Gas & Electric Corp, is a regulated transmission and distribution utility serving about 300,000 electric and 75,000 natural gas customers in eight counties of New York State’s Mid-Hudson River Valley.