Home » NEWS » Manufacturing » Entergy to spin off transmission business to ITC

Entergy to spin off transmission business to ITC

Utility holding company Entergy Corp. plans to spin off its electric transmission business and merge it into ITC Holdings Corp., which operates power transmission lines in the Midwest.

Entergy, based in New Orleans, said Monday that it will receive about $1.78 billion in cash, and its stockholders will receive shares of a new company created by the combination of Novi, Mich.-based ITC and the Entergy business. Entergy shareholders will have a 50.1 percent stake in the new company.

The deal is expected to close in 2013.

ITC shares climbed 4.4 percent, or $3.22 to $77 in premarket trading.

The combined company will have a presence in 12 states, including Michigan, Iowa, Louisiana, Mississippi, Alabama and Texas, and it will focus solely on transmitting power, not generating it or delivering it to homes or businesses. It will become one of the largest electrical transmission companies in the United States, with more than 30,000 miles of transmission lines, according to a statement from the companies.

The deal will “significantly enhance” ITC’s operations scale and financial resources and help the company deliver sustainable, long-term growth, Chairman and CEO Joseph L. Welch said in a statement.

Entergy’s electric transmission business consists of about 15,700 miles of transmission lines. Entergy will use most of the cash from the deal to retire debt tied to that business.

ITC also said Monday that it expects 2012 earnings to range between $3.90 and $4.05 per share, excluding expenses tied to the Entergy deal. Analysts surveyed by FactSet expected, on average, earnings of $4.03 per share.


… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Megan Wright

Leave a Reply

Your email address will not be published. Required fields are marked *