Entergy, ITC call off grid sale, citing states' opposition

HOUSTON Fri Dec 13, 2013 12:30pm EST

HOUSTON Dec 13 (Reuters) - Entergy Corp called off a $1.78 billion plan to divest its transmission operation to ITC Holdings Corp on Friday, three days after Mississippi regulators rejected the plan.

The transaction, announced in 2011, had received federal and ITC shareholder approval but was unable to get the required support from state and local regulators who were concerned about rising transmission costs and the loss of control over rates.

A unanimous rejection by the Mississippi Public Service Commission on Tuesday effectively killed the deal.

The transaction would have been a spinoff and merger of Entergy's 15,000-mile (24,000-km) transmission network serving parts of Arkansas, Louisiana, Mississippi and Texas with ITC Holdings.

"While we strongly believe that the transaction would be in the best interests of our customers and all stakeholders, it is clear we don't have the necessary regulatory support to close the transaction," Leo Denault, Entergy's chairman and chief executive, said in a statement.