Stock Market Watch

Entergy to Spin off Electric Transmission Business (ETR)

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Shares of Entergy Corporation (NYSE: ETR), an integrated energy company engaged in electric power production and retail electric distribution operations, have risen sharply in early trading today after the company announced that it will spin-off its electric transmission business.

Entergy and ITC Holding Corporation (NYSE: ITC) today announced that their Boards approved a definitive agreement under which Entergy will spin off and then merge its electric transmission business into ITC.


Entergy’s electric transmission business includes nearly 15,700 miles of interconnected transmission lines at voltages of 69kV and above and related substations across its utility service territory in the Mid-South. On the completion of the transaction, ITC will become one of the largest electric transmission companies in the U.S., with more than 30,000 miles of transmission lines.

J. Wayne Leonard, Chairman and CEO of the New Orleans-based Entergy, said that the company is pleased to have reached this agreement with ITC and after careful consideration, it believes the transaction is without a doubt the right decision for customers and stakeholders. Leonard said that the transaction allows the company to maintain the financial flexibility necessary to address the growing challenges the industry faces, including significant infrastructure investment.

Joseph L. Welch, Chairman, President and CEO of ITC, said that the transaction furthers the company’s position as a preeminent electric transmission owner, operator and developer in the U.S.

Under the terms of the agreement, Entergy will divest its electric transmission business to a newly-formed entity, Mid South TransCo LLC. Entergy will distribute the newly-formed entity to its shareholders in the form of a tax-free spin-off. The entity will then be merged with a newly-created subsidiary of ITC in an all-stock Reverse Morris Trust transaction.

Entergy shares are currently trading 4.04% higher at $72.45. The stock gained 2.39% this year, compared with a gain of 0.24% for the S&P 500.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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