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Industry Brief

Tucson, AZ-based UNS Energy Corp.'s board of directors unanimously approved the electric-natural gas utility holding company's acquisition by Canada-based Fortis Inc. Owner of Canada's largest gas and electric distribution utility, St. John's, Newfoundland/Labrador-based Fortis is offering to pay about $2.5 billion, or $60.25/share, in cash to acquire UNS, which owns Tucson Electric Power and separate UNS Electric and UNS Gas utility operations, all in Arizona. This is Fortis' second U.S. utility acquisition this year, having closed the nearly $1 billion purchase of CH Energy Group Inc. last June. Overall, the UNS purchase is considered to be a $4.3 billion transaction since Fortis has agreed to assume the $1.8 billion in outstanding UNS debt. The transaction is subject to various U.S. federal and state approvals, including the Arizona Corporation Commission (ACC), which in 2004 rejected an acquisition of UNS (the UniSource Energy Corp.) by a private investment group led by KKR & Co. That deal was found not to be in the public interest by the five-member ACC.

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