ITC Itc Holdings Corp.

Canadian utility operator Fortis Inc. on Tuesday said it agreed to buy U.S. electricity-transmission company ITC Holdings Corp. for about $6.9 billion in cash and stock.

ITC shareholders will receive $22.57 in cash and 0.752 Fortis shares for each ITC share. Based on Fortis' closing price Monday in Toronto, the deal values ITC at about $44.90 a share.

Michigan-based ITC in late November said it was looking into strategic alternatives, including a possible sale.

Fortis said it intends to retain all ITC employees and that ITC will continue as a stand-alone operation with headquarters in Novi, Mich. ITC shareholders will own about 27% of the combined company.

"ITC not only further strengthens and diversifies our business, but it also accelerates our growth," said Fortis Chief Executive Barry Perry.

Fortis, which also will assume about $4.4 billion in ITC debt, said it would apply to list it shares on the New York Stock Exchange and will keep its shares listed on the Toronto Stock Exchange.

The boards of both companies have approved the deal, but regulatory and shareholder approvals are still required. Fortis expects the deal to close in late 2016.

Originally a unit of DTE Energy Co., ITC was sold in 2003 for about $610 million to a group that included New York private-equity firms KKR & Co. and Trimaran Capital Partners LLC. It went public in 2005.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

February 09, 2016 08:05 ET (13:05 GMT)

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