The Canadian Competition Bureau on Wednesday gave the clearance for Fortis Inc. (TSX:FTS) to acquire Terasen Inc. from a wholly owned subsidiary of Kinder Morgan, Inc. (NYSE:KMI) for a purchase price of $3.7 billion, including the assumption of approximately $2.3 billion of debt.
Terasen (formerly BC Gas Inc.) is a holding company headquartered in Vancouver, British Columbia, operating two principal lines of business: natural gas distribution and petroleum transportation. The purchase does not include the petroleum transportation assets of Kinder Morgan Canada (formerly Terasen Pipelines), which are comprised primarily of refined and crude oil pipelines.
##banner##The no-action letter confirms the finding of the Commissioner of Competition that no grounds exist at this time for the Commissioner to initiate proceedings before the Competition Tribunal under the merger provisions of the Competition Act (Canada) in respect of this transaction.
The granting of this no-action letter satisfies one of the closing conditions in the acquisition agreement between Fortis and Kinder Morgan, Inc. The closing of the acquisition is subject to fulfillment of other customary conditions including approval by the British Columbia Utilities Commission. The acquisition is expected to close in mid-2007.
Fortis is principally a diversified, international distribution utility holding company with assets exceeding $5.4 billion and annual revenues of approximately $1.5 billion. Fortis has holdings in regulated electric distribution utilities in Alberta, British Columbia, Newfoundland, Ontario, Prince Edward Island, Belize, Grand Cayman and the Turks and Caicos Islands.
