Major stateside acquisition for Fortis Inc.
Castlegar News contributor
Local energy supplier Fortis Inc. plans to acquire Arizona based UNS Energy Corporation. The merger will cost Fortis approximately 4.3 billion dollars in US funds. The closing of the acquisition is expected to occur before the end of 2014. The deal is pending the approval of UNS Energy common shareholders plus regulatory and government approvals.
UNS Energy is a utility services company with headquarters in Tucson, Arizona. The company services about 654,000 electricity and gas customers in southern Arizona. UNS Energy Corporation is the parent company of Tucson Electric Power and Unisource Energy Services. The utility is located in an area with favorable economic conditions and growth.
After the acquisition is complete, Fortis will have more than 3,000,000 customers. In a company statement explaining the merger, Stan Marshall, President and Chief Executive Officer of Fortis said, “The Acquisition of UNS Energy is consistent with our strategy of investing in high-quality regulated Canadian and U.S. utility assets … The Acquisition further mitigates business risk for Fortis by enhancing the geographic diversification of our businesses, resulting in no more than one-third of total assets being located in any one regulatory jurisdiction.”
Marshall also stated, “UNS Energy will remain a standalone utility in the Fortis model. Its headquarters and management team will remain in Tucson, Arizona and its customers will not pay for any costs related to the transaction.”
With assets over $17 billion Fortis is the largest investor-owned gas and electric utility company in Canada. Based in St. John’s, Newfoundland, Fortis distributes electricity to five Canadian provinces, New York State and two Caribbean countries. It also has natural gas utilities in British Columbia, Canada and New York State.
David Hutchins, UNS Energy’s President and Chief Operating Officer stated in a December news release, “Fortis has built a successful track record of investing in fundamentally strong utilities that remain deeply engaged with the communities they serve. They proposed this partnership because they like the way we do business, not because they are looking to change it.”
In the same news release UNS Energy’s Chairman and Chief Executive Officer Paul Bonavia said, “Joining the Fortis family will provide UNS Energy with new financial strength, helping us maintain safe, reliable and affordable service for our utility customers as we address the capital-intensive challenges facing our industry.”