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Enbridge and Spectra merger to close soon

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World Pipelines,

Enbridge Inc. (Enbridge) and Spectra Energy Corp (Spectra Energy) have announced that the previously announced merger of the two companies (the Transaction) has received all required regulatory clearances under the merger agreement, including from the Canadian Competition Bureau, and is expected to close on 27 February 2017.

"We are very pleased to have now received all required regulatory clearances and we look forward to realising the significant customer and shareholder benefits of combining these two strong companies," said Al Monaco, President and Chief Executive Officer of Enbridge. "With the completion of the Transaction, Enbridge will become a leading global energy infrastructure company and the largest in North America with roughly CAN$166 billion (US$126 billion) in enterprise value and the strongest liquids and natural gas infrastructure franchises on the continent. We will have a diverse set of low risk businesses comprised of a best in class network of crude oil, liquids and natural gas pipelines, a large portfolio of strong, regulated gas distribution utilities and a growing renewable power generation platform. The combined company will be positioned to provide integrated services and first and last mile connectivity to virtually all key liquids and gas supply basins and demand markets in North America."

Monaco added: "A significant amount of collaboration has allowed us to get to this point. The two companies have completed extensive planning in advance of closing and will be focused on a successful integration. Our teams are well prepared to ensure a smooth transition for our customers, employees and other stakeholders, while maintaining a sharp focus on our number one priority – the safety and reliability of our networks. We look forward to realising the benefits of this strategic combination while delivering the energy people want and need."

Spectra Energy Chief Executive Officer, Greg Ebel, who will become chairman of Enbridge once the Transaction closes, said: "By combining the strength of Enbridge with the strength of Spectra Energy, we are creating an unrivaled company that will provide superior value – now and into the future – for our customers, employees, investors and communities. The Transaction will significantly enhance and extend the dividend growth outlook for Spectra Energy shareholders. No other company in our industry will have this kind of high return, low risk model that investors value so highly."

Enbridge expects the transaction will support its 12 - 14% secured ACFFO per share CAGR guidance over the 2015 - 2019 planning horizon, and will be strongly additive to the Company's growth outlook beyond that timeframe.

As previously announced, following the closing of the Transaction, Enbridge will have a substantial capital project portfolio, including CAN$27 billion (US$21 billion) of commercially secured growth projects coming into service between 2017 and 2019, and CAN$48 billion probability-weighted development project portfolio. The growth program is expected to enable the Company to deliver highly visible ongoing dividend growth of 10 - 12% per year, on average, through 2024, while maintaining a conservative payout of 50 - 60% of ACFFO.

Enbridge is committed to maintaining its financial strength. In order to further reinforce its financial position and help support continued strong investment grade credit ratings, the transaction was structured as a share for share exchange. No incremental debt will be incurred on closing of the Transaction. In addition, at the time the transaction was announced last September, Enbridge set a target of monetising CAN$2 billion of non-core assets to provide additional financial strength and flexibility. Approximately CAN$1.7 billion of that CAN$2 billion target has been achieved through the sale of its South Prairie Region assets and agreements to sell additional non-core assets. Enbridge management has identified other potential divestments that should enable the company to meet or exceed this target. No follow-on equity offerings by Enbridge are required to complete funding of the combined secured C$27 billion (US$21 billion) secured growth programme through 2019.

The combination is expected to achieve annual run-rate synergies of pre-tax CAN$540 million (US$415 million) by 2019. Detailed plans have been developed to capture a good portion of these synergies in the current year. In addition, the Company expects that approximately CAN$260 million (US$200 million) of tax savings can be achieved through utilisation of tax losses commencing in 2019.

Guidance for the combined company for 2017 will be provided in conjunction with the first quarter financial results. Enbridge expects to provide a business and integration update for investors in June 2017 and is planning an investor conference in December, at which time additional detail on the company's strategic priorities and long range financial outlook will be provided.

Governance and employee matters

Enbridge announced today a new Board of Directors that will take effect as of the closing of the Transaction. Under the terms of the transaction, the Board of Directors of Enbridge will consist of eight members designated by Enbridge, including Monaco (President and CEO), and five members designated by Spectra Energy, including Ebel as chairman of the board. Besides Monaco, the directors designated by Enbridge, all of whom currently serve as directors of Enbridge, are Marcel R. Coutu, J. Herb England, Charles W. Fischer, V. Maureen Kempston Darkes, Rebecca B. Roberts, Dan C. Tutcher and Catherine L. Williams. In addition to Ebel (Chair), the directors designated by Spectra Energy are Pamela L. Carter, Clarence P. Cazalot, Jr., Michael McShane and Michael E.J. Phelps, all of whom currently serve as directors of Spectra Energy.

Concurrent with the closing of the transaction, David A. Arledge (Chair), James J. Blanchard and George K. Petty will be retiring from the Enbridge board while F. Anthony Comper, Austin A. Adams, Joseph Alvarado, Peter B. Hamilton, Miranda C. Hubbs and Michael G. Morris will be retiring from the Spectra Energy board. Both Monaco and Ebel thank those retiring board members for their contributions to the success of their respective companies. "We're grateful to those retiring board members from the two companies for their leadership, dedication, and guidance. They have provided great stewardship to help build the two very strong organisations that we are combining."

Monaco added that he looks forward to welcoming Spectra Energy employees to Enbridge. "We're bringing together two exceptional teams with strong values and a shared approach to safety, our stakeholders and our communities. We will move forward together, building from our proven strengths to position Enbridge to deliver infrastructure growth opportunities for our customers and continue to create value for our shareholders."

As previously announced, the headquarters of the combined company will be in Calgary, Alberta. Houston, Texas, will be the combined company's gas pipelines business unit center; Edmonton, Alberta, will remain the business unit center for liquids pipelines, with the business unit centers for gas distribution continuing to be based in Ontario. The combined company at close will have approximately 17 000 employees.

Dividends and stock listings

Spectra Energy will make its final common share dividend payment on 1 March 2017, to Spectra shareholders of record on 15 February 2017. In January, Enbridge announced a 10% increase in its quarterly common share dividend payable on 1 March 2017, to shareholders of record on 15 February 2017. It is expected that the first quarterly common share dividend post-combination will be payable on 1 June 2017, subject to board approval, and is expected to include a further increase to bring the aggregate increase in Enbridge's quarterly dividend to approximately 15% above the prevailing quarterly rate in 2016.

Trading in shares of Spectra Energy on the New York Stock Exchange will be suspended effective as of the opening of trading on 27 February 2017. In connection with the completion of the transaction, the shares of common stock of Spectra Energy will be delisted from the NYSE and will be de-registered under the US Securities Exchange Act of 1934. Common shares of Enbridge will continue to trade on both the NYSE and the Toronto Stock Exchange under the symbol "ENB".

Enbridge Energy Partners, L.P. and Spectra Energy Partners, LP will continue to be publicly traded partnerships headquartered in Houston, Texas. Enbridge Income Fund Holdings Inc. will remain a publicly traded corporation headquartered in Calgary, Alberta. At Transaction closing, Midcoast Energy Partners, L.P. (Midcoast) will be a publicly traded partnership headquartered in Houston; however as announced on 27 January 2017, all of the outstanding publicly held common units of Midcoast are expected to be acquired by an Enbridge affiliate during the second quarter of 2017 and Midcoast would cease to be a publicly listed entity at that time.

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