UNS Energy Corp., the parent of Tucson Electric Power Co., has agreed to be acquired by Canada-based utility Fortis Inc. in a deal worth $4.3 billion, the companies said Wednesday.

Both of UNS utility subsidiaries, TEP and rural provider UniSource Energy Services, “will remain headquartered in Tucson under local control with current management and staffing levels and no planned changes to existing operations or rates,” the companies said.

The merger agreement — which still requires shareholder and regulatory approval — calls for Fortis, Canada’s largest investor-owned gas and electric distribution utility, to acquire all of the outstanding common stock of UNS Energy for $60.25 per share in cash, plus the assumption of about $1.8 billion in debt.

Before the merger announcement, UNS shares closed Wednesday at $45.85, down 46 cents, in trading on the New York Stock Exchange. UNS is the only Tucson-based company traded on the Big Board and one of a handful of locally based public companies.

“Joining the Fortis family will provide UNS Energy with new financial strength, helping us maintain safe, reliable and affordable service for our utility customers as we address the capital-intensive challenges facing our industry,” Paul Bonavia, UNS Energy’s chairman and CEO, said in a news release.

The proposed acquisition will be submitted early next year for the approval of UNS Energy shareholders, the company said.

The deal is also subject to the approval of regulators including the Arizona Corporation Commission and the Federal Energy Regulatory Commission, as well as federal antitrust review and other customary closing conditions. UNS expects the transaction will be finalized before the end of 2014.

In 2004, the Corporation Commission rejected a proposed private leveraged buyout of UNS, then known as UniSource Energy Corp., by a group led by Kohlberg Kravis Roberts & Co. That deal was for $25.25 per share, or a total of nearly $3 billion, but regulators winced at the addition of up to $660 million in new debt.

But in contrast to leveraged-buyout specialist KKR, Fortis — which recently closed on the purchase of a New York utility — has a strong reputation for its utility management, said Maurice E. May, an analyst with Power Insights/Wellington Shields.

“The buyer’s not a corporate raider — they’re bringing in a well-respected utility from Canada,” said May, who also follows Fortis utilities.

UNS also may have an easier time getting the deal through the current commission, which is made up of conservative, free-market Republicans, said May. The all-Republican commission that rejected the KKR deal in 2004 was more liberal and less market-oriented, May said.

Based in St. John’s, Newfoundland, Fortis is the largest investor-owned distribution utility in Canada. It serves more than 2 million customers through electric utilities in five Canadian provinces and two Caribbean countries, and a natural gas utility in British Columbia.

Fortis has announced a strategy of acquiring small- to mid-sized American utilities in the U.S., May said.

In June, Fortis completed a $1.5 billion buyout of CH Energy Group, the parent company of Central Hudson Gas & Electric Corp. in New York. So far, the company has retained local management of acquired utilities and allowed them free hand to run their businesses, May said.

The Fortis deal would give UNS greater access to capital and perhaps other resources, May said.

UNS said that Fortis has pledged to maintain or expand TEP’s and UES’ charitable giving, philanthropic partnerships and low-income assistance programs.

“Fortis has built a successful track record of investing in fundamentally strong utilities that remain deeply engaged with the communities they serve,” said David Hutchens, UNS Energy’s president and chief operating officer. “They proposed this partnership because they like the way we do business, not because they’re looking to change it.”

Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 573-4181.