Fortis Inc. Acquisition of CH Energy Group, Inc. Approved by New York State Public Service Commission
June 13 2013 - 1:45PM
Marketwired
Fortis Inc. ("Fortis" or the "Corporation") (TSX:FTS) and CH Energy
Group, Inc. ("CH Energy Group") (NYSE:CHG), the parent company of
Central Hudson Gas & Electric Corporation ("Central Hudson"),
announced today that the New York State Public Service Commission
(the "NYSPSC") has voted to approve the Corporation's agreement to
acquire CH Energy Group (the "Acquisition"). Closing of the
Acquisition is expected to occur shortly after receipt, review and
acceptance of the official written order of the NYSPSC.
On February 21, 2012, Fortis and CH Energy Group announced that
Fortis had entered into an agreement to acquire CH Energy Group for
US$65.00 in cash per share, representing an aggregate purchase
price of approximately US$1.5 billion, including the assumption of
approximately US$500 million of debt at closing.
Central Hudson, the main business of CH Energy Group, is a
regulated transmission and distribution utility serving
approximately 300,000 electric and 75,000 natural gas customers in
eight counties of New York State's Mid-Hudson River Valley. As at
December 31, 2012, Central Hudson accounted for approximately 93
percent of CH Energy Group's total assets of approximately US$1.8
billion. Central Hudson accounted for approximately 95 percent of
CH Energy Group's net income in 2012, excluding the impact of
acquisition-related expenses.
"Central Hudson is a well-run utility whose employees, like
those throughout the Fortis federation of utilities, are committed
to serving their customers and their communities," says Stan
Marshall, President and Chief Executive Officer of Fortis. "We
welcome the employees of Central Hudson to the Fortis team, and we
look forward to their contribution as we continue to meet our
customers' energy needs safely, reliably and cost effectively," he
said.
"Our new association with Fortis provides substantial and
lasting benefits for our customers, and the Fortis business model
retains Central Hudson as a standalone company," said Steven V.
Lant, Chairman of the Board and President of CH Energy Group. "In
our capital intensive and increasingly consolidating industry,
becoming a member of the Fortis federation of utilities ensures we
are able to effectively serve our customers now and in the future.
Central Hudson's ability to make required energy infrastructure
investments, which are expected to be more than $100 million
annually over the next five years, is strengthened by being a part
of the Fortis federation."
The Acquisition provides Central Hudson customers with nearly
US$50 million in financial benefits to moderate future delivery
rates, enhance economic development programs in the areas serviced
by Central Hudson and provide further assistance to low-income
families in the service area. Delivery rates will be frozen for an
additional two years, effectively holding rates constant for the
three-year period from July 2012 through June 2015. All employees
of Central Hudson will retain their jobs for at least four years
and an additional 35 union positions will be created. Central
Hudson will operate as a standalone company, its current level of
community support will be guaranteed for at least 10 years and a
new board of directors will have increased local
representation.
About Fortis
Fortis is the largest investor-owned distribution utility in
Canada, serving more than 2 million gas and electricity customers.
Its regulated holdings include electric utilities in five Canadian
provinces and two Caribbean countries and a natural gas utility in
British Columbia. Fortis owns non-regulated hydroelectric
generation assets in Canada, Belize and Upstate New York. The
Corporation also owns hotels and commercial real estate in
Canada.
About CH Energy Group
CH Energy Group is an energy delivery company headquartered in
Poughkeepsie, New York. Its regulated transmission and distribution
subsidiary Central Hudson serves approximately 300,000 electric and
75,000 natural gas customers in eight counties of New York State's
Mid-Hudson River Valley, delivering natural gas and electricity in
a 2,600-square-mile service territory that extends north from the
suburbs of metropolitan New York City to the Capital District
around Albany. CH Energy Group also operates Central Hudson
Enterprises Corporation, a non-regulated subsidiary composed
primarily of Griffith Energy Services, which supplies petroleum
products and related services to approximately 56,000 customers in
the Mid-Atlantic Region.
Forward Looking Information
Fortis includes forward-looking information in this press
release within the meaning of applicable securities laws in Canada
("forward-looking information"). The purpose of the forward-looking
information is to provide management's expectations regarding the
completion of the Acquisition and the expected timing and benefits
thereof, the Corporation's future growth, results of operations,
performance, business prospects and opportunities, and it may not
be appropriate for other purposes. All forward-looking information
is given pursuant to the safe harbour provisions of applicable
Canadian securities legislation. The words "anticipates",
"believes", "budgets", "could", "estimates", "expects",
"forecasts", "intends", "may", "might", "plans", "projects",
"schedule", "should", "will", "would" and similar expressions are
often intended to identify forward-looking information, although
not all forward-looking information contains these identifying
words. The forward-looking information reflects management's
current beliefs and is based on assumptions developed using
information currently available to the Corporation's management.
Although Fortis believes that the forward-looking statements are
based on information and assumptions which are current, reasonable
and complete, these statements are necessarily subject to a variety
of risks and uncertainties. For additional information on risk
factors that have the potential to affect the Corporation,
reference should be made to the Corporation's continuous disclosure
materials filed from time to time with Canadian securities
regulatory authorities and to the heading "Business Risk
Management" in the Corporation's annual and quarterly Management
Discussion and Analysis. Except as required by law, the Corporation
undertakes no obligation to revise or update any forward-looking
information as a result of new information, future events or
otherwise after the date hereof.
Contacts: Mr. Barry Perry Vice President, Finance and Chief
Financial Officer Fortis Inc. (709) 737-2800
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