TORONTO (Reuters) - Canadian utility Fortis Inc FTS.TO expects to make further acquisitions in North America after it completes an $11.3 billion purchase of ITC Holdings Corp ITC.N, its chief executive said.
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.
“I do believe long-term there will be further opportunities for Fortis to continue to expand in North America,” CEO Barry Perry said in an interview on Thursday.
Fortis expects to complete the ITC acquisition on Friday, having received clearance from regulatory bodies. On its website, ITC describes itself as the U.S.’s largest independent electricity transmission company.
At the same time, Fortis will list on the New York Stock Exchange for the first time in its 130-year history.
Perry said that although the company is focusing on the integration of ITC, he would not rule out further acquisitions next year.
“There are just so few opportunities in this sector that you can’t really take yourself out of the game completely. You do need to continue to nurture conversations and we’ll continue to do that,” he said.
Perry said he would look at opportunities in Canada but it was more likely future acquisitions would be made in the United States.
“Unfortunately, in Canada, there remains very few investor-owned opportunities left. The energy infrastructure that remains is mostly owned by governments and big crown corporations and we don’t see those assets becoming available,” he said.
The company said in September that it expected to deliver annual dividend growth of at least 6 percent until 2021.
“We’re pretty comfortable with that. We’ll see how the integration of ITC goes and we’ll make another consideration of that sometime next year,” Perry said.
Reporting by Matt Scuffham; Editing by Steve Orlofsky and Andrew Hay