Central Hudson, the regional utility providing energy to much of the Mid-Hudson Valley, announced Tuesday, Feb. 21 that it has agreed to its sale to a Canadian electric and gas distribution firm, Fortis Inc., for about $1.5 billion in cash, including the assumption by Fortis of $500 million in Central Hudson debt.
Holders of the common stock of CH Energy Group, parent company of the local utility, will get $65 per share, about a 10 percent premium over the stock price at its close Friday afternoon. According to releases from both companies,Central Hudson, which has assets of about $1.7 billion, will become a standalone subsidiary of Fortis, which has $13.6 billion in assets. The sale is subject to approval by the state Public Service Commission.
Central Hudson joins the parade of regional public utilities that have been consolidating in recent years. It was an earlier phase of consolidation allowed Central Hudson to merge over 80 independent electric and gas companies into Central Hudson Gas & Electric Corporation in the early 20th century. Despite the merger with Fortis, the local energy company expects to remain headquartered in Poughkeepsie.
Fortis, more than three-quarters of whose relatively modest generating capacity is from hydroelectric power, boasts of being the largest private distribution utility in Canada, with over 2 million gas and electric customers and 7,100 employees in its regulated and non-regulated businesses. Central Hudson has about 1,250 employees, of which 850 work in its regulated businesses.
Under longtime chief executive H. Stanley “Stan” Marshall, Fortis has supplemented its core businesses as a regulated utility with ownership of a range of non-regulated activities. It employs 2,300 people in its 22 hotels and holds 2.7 million square feet of commercial and retail real estate in Canada through a subsidiary, Fortis Properties.
Fortis also owns small utilities in Grand Cayman Island and Turks and Caicos. It generates a small amount of hydro power in upper New York State and in Belize.
Slideshow image: Fortis CFO Barry Perry and Central Hudson Senior VP of Customer Service Charlie Freni on tour with Central Hudson Call Center Manager Linda Harrison. (Photo courtesy Central Hudson.)