05/30/2011 07:47 EDT | Updated 07/30/2011 05:12 EDT

Fortis: Central Vermont U.S. Power Purchase Is Entry Into New Market

(THE CANADIAN PRESS) -- ST. JOHN'S, N.L. - Fortis Inc. is acquiring a Vermont-based integrated electric utility company for US$700 million, giving the Newfoundland-based company its first entry into the U.S. regulated power industry.

The St. John's, N.L.-based company says it will pay US$35.10 per share in cash for Central Vermont Public Service Corp. (NYSE:CV), in a transaction that includes the assumption of about US$230 million in debt.

Fortis says the acquisition is expected to add to its earnings within the first year of owning the company.

"CVPS is a well-run utility whose operations are very similar to those of our Canadian regulated utilities, allowing us to use our collective competencies to further enhance service to customers and returns to our shareholders," said president and CEO Stan Marshall.

"The acquisition of CVPS represents the initial entry by Fortis into the U.S. regulated electric utility marketplace and establishes a foundation for Fortis to grow our utility business in the United States."

The transaction still requires approval of Central Vermont Public Service's shareholders, as well as approval from the Vermont Public Service Board and the U.S. Federal Energy Regulatory Commission.

Fortis (TSX:FTS) owns Newfoundland Power as well as other utilities in Ontario, British Columbia, Alberta and P.E.I.