Fortis clears another regulatory hurdle to buy ITC

The Canadian utility is one step closer towards completing the $11.3bn acquisition of the US transmission business, having received approval from the Illinois Commerce Commission.

The Illinois Commerce Commission is the latest authority to approve Fortis’ plan to acquire ITC Holdings, the largest independent electricity transmission company in the US with a combined peak load capacity exceeding 26GW.

“The decision marks another significant advancement in the regulatory approval process,” Fortis, a Canadian electric and gas utility headquartered in Newfoundland and Labrador, said in a statement. The transaction is on course to close by the end of the year.

In April, Singapore’s sovereign wealth fund GIC announced that it would be investing $1.2 billion in cash for a 19.9 percent stake in the company, which runs 15,700 circuit miles of transmission lines. At the time, at least six law firms had launched investigations into the fairness of the transaction, over concerns the ITC board may not be fulfilling its fiduciary duties to shareholders. However, since then shareholders of both companies have granted their approval.

Other approvals came through in July and August, with the Committee on Foreign Investment in the United States and the Oklahoma Corporation Commission also giving their green light. In addition, the post-filing waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on 10 August, according to the statement.

Before the transaction can close by the end of the year, Fortis will need clearance from the Federal Energy Regulatory Commission and approvals from the five other states in which ITC operates in addition to Illinois and Oklahoma. These are Michigan, Iowa, Minnesota, Missouri and Kansas.

The Canadian utility, which announced its plans for the $11.3 billion acquisition in February, has promised to retain all of ITC’s employees and to maintain the company’s headquarters in Novi, Michigan.

Upon closing, ITC will become a Fortis subsidiary but will continue as a standalone transmission company.