UPDATE 2-Canada's Fortis bulks up regulated power business with ITC buy
* Deal for $6.9 bln in cash and stock
* Deal for $45 per ITC share, a 14 pct premium
* Fortis to also assume $4.4 bln of ITC's debt
* Fortis to sell 19.9 pct of ITC to investor (Adds details)
Feb 9 (Reuters) - Canadian utility Fortis Inc said it would buy U.S. power transmission company ITC Holdings Corp for $6.9 billion - its biggest deal ever - to boost its exposure to regulated power markets, which have stable power prices.
Falling electricity demand due to increased energy efficiency has spurred a spate of mergers in the United States, with utilities looking to cut their exposure to volatile power prices in unregulated markets.
ITC shareholders will get $45 per share - $22.57 in cash and 0.7520 Fortis shares for each share they hold - a 14 percent premium to the stock's closing price on Monday.
ITC's transmission lines, which carry electricity from power plants to cities, are regulated by the Federal Energy Regulatory Commission (FERC). These lines tend to be more profitable for utilities than state-regulated distribution lines within cities.
The company, which said in November that it was exploring strategic options, owns and operates 15,600 miles (25,000 km) of transmission lines and facilities in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma. Continued...