8-K

ENBRIDGE INC 8-K Report (Feb 23, 2017)

Filed February 23, 2017For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) announced via an 8-K filing on February 23, 2017, that its merger with Spectra Energy Corp. has received all necessary regulatory approvals and is expected to close on February 27, 2017. This union is set to create a formidable North American energy infrastructure company with an enterprise value of approximately C$166 billion (US$126 billion). The combined entity boasts a diverse portfolio, including liquids and natural gas pipelines, gas distribution utilities, and renewable power generation, positioning it as a leader across key energy sectors. Investors can anticipate significant long-term growth drivers, with C$27 billion in secured growth projects and a substantial development pipeline, supporting Enbridge's commitment to 10-12% average annual dividend increases through 2024. The merger is structured as a share-for-share exchange, meaning no incremental debt will be incurred at closing, reinforcing a strong, investment-grade balance sheet. Enbridge also anticipates substantial run-rate synergies of C$540 million pre-tax by 2019 and significant tax savings. The company plans to provide updated guidance for the combined entity in Q1 2017 and further strategic and financial outlooks in June and December of 2017. This transaction marks a pivotal moment for Enbridge, enhancing its scale, strategic positioning, and commitment to shareholder returns.

Key Highlights

  • 1Merger with Spectra Energy Corp. expected to close on February 27, 2017, following receipt of all regulatory clearances.
  • 2Creation of the largest energy infrastructure company in North America with an enterprise value of approximately C$166 billion (US$126 billion).
  • 3Combined company will possess leading positions in liquids and natural gas pipelines, gas distribution, and renewable power generation.
  • 4Strong growth pipeline with C$27 billion in secured projects and C$48 billion in probability-weighted development projects.
  • 5Commitment to 10-12% average annual dividend increases from 2018 through 2024, with a conservative payout ratio.
  • 6Merger structured as a share-for-share exchange, preserving a strong, investment-grade balance sheet with no incremental debt.
  • 7Expected pre-tax run-rate synergies of C$540 million (US$415 million) by 2019 and estimated tax savings of C$260 million (US$200 million) beginning in 2019.

Frequently Asked Questions

The merger between Enbridge Inc. and Spectra Energy Corp. is expected to officially close on February 27, 2017, as all required regulatory clearances have been obtained.

The combined company will be the largest energy infrastructure company in North America with an approximate enterprise value of C$166 billion (US$126 billion).

Enbridge expects to deliver 10 to 12 percent average annual dividend increases through 2024. Following the close, the first quarterly dividend is expected to represent an aggregate increase of approximately 15% above the 2016 quarterly rate.

The transaction is structured as a share-for-share exchange, meaning no incremental debt will be incurred at closing. This structure is intended to reinforce Enbridge's strong, investment-grade balance sheet.

Enbridge expects to provide 2017 guidance with its first-quarter financial results. A business and integration update is planned for June 2017, with a more comprehensive investor conference in December 2017, where long-range financial outlooks will be shared.