Top Questions from Retail Investors on Spectra Energy (‘Spectra’) Merger

Q: Why are Enbridge and Spectra merging?

Enbridge and Spectra have decided to combine to create a Company that is greater than the sum of its parts – a Company that is truly North America’s premier energy infrastructure company. The combination of Enbridge and Spectra creates a company with:

  • A diversified asset base that’s almost equally weighted between liquids and gas;
  • A combined growth program of over $74B for future growth across all our business platforms, that support expected dividend growth of 10 – 12% through 2024; and
  • “Best in class” assets and commercial underpinnings.

Ultimately, we believe the new Enbridge will be well positioned to be successful in the future to serve our customers and create value for shareholders.

Q: Is this an acquisition or a merger?

Enbridge and Spectra have entered into a merger agreement under which Enbridge will acquire all of the shares of Spectra.

Q: What price is Enbridge paying for Spectra’s stock?

This transaction is an all stock deal, which values Spectra’s common stock at approximately $37B based on the closing price of ENB’s common shares on September 2, 2016. This price represents an approximate 11.5% premium to the closing price of Spectra common stock at that time.

Q: I’m a Spectra shareholder – what will I receive for my Spectra shares?

As a Spectra common shareholder you will be entitled to receive 0.984 of an Enbridge common share for each of your Spectra common shares.

Q: When will I receive my new Enbridge shares?

You will receive your new shares once the transaction has closed. At that time, Spectra will be delisted from the NYSE.

Q: What dividend will I receive for each new Enbridge share?

Enbridge’s 2016 dividend per share is $2.12. Enbridge expects to announce its 2017 standalone dividend per share in January, on the same schedule as Spectra’s 2017 standalone dividend per share announcement.

As part of the merger announcement, a 15% aggregate increase to the quarterly 2017 dividend per share was announced, contingent on deal close. This increase, which is contingent on the deal closing, will be announced as part of the first normally scheduled, quarterly dividend declaration following close.

Q: Which stock exchanges do Enbridge shares trade on?

Enbridge common shares trade on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under the trading symbol “ENB”.

Q: As a Spectra shareholder I currently receive dividends in U.S. dollars - will my new dividends continue to be paid in U.S. dollars?

Enbridge shares trading on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) will pay dividends in Canadian dollars. Enbridge declares its dividend in Canadian dollars. However, Enbridge delivers payment to U.S. holders of Enbridge common shares in U.S. dollars. The U.S. dollar value of any cash payment for declared dividends to a U.S. holder of Enbridge common shares will be converted into U.S. dollars using the noon exchange rate quoted by the Bank of Canada on the declared record date. Fluctuations in the Canadian dollar/U.S. dollar exchange rate may impact the value of any dividend payments received by U.S. holders of Enbridge common shares.

Q: Do you expect the merger to be taxable to Spectra shareholders?

Generally speaking, it is intended that, for U.S. federal income tax purposes, the merger will qualify as a “reorganization” and will not result in gain recognition to Spectra Energy stockholders. As each shareholder’s situation is different, Spectra shareholders should consult their own tax advisors to confirm their own tax treatment.

More information is included in the final F-4 Proxy Circular/Prospectus found under “Certain U.S. Federal Income Tax Consequences” at the following link:
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&filenum=333- 213764&owner=exclude&count=40

Q: Will Enbridge’s dividend be subject to Canadian withholding taxes after the merger?

Yes, Canadian withholding taxes are expected to apply to dividends paid to U.S. shareholders. Subject to certain limitations, Canadian tax withheld will be deductible against your U.S. federal income tax liability. The rules governing the foreign tax credit are complex and involve the application of rules that depend upon a U.S. holder’s particular circumstances. Accordingly, U.S. holders should to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

More information is included in the final F-4 Proxy Circular/Prospectus found under “Certain U.S. Federal Income Tax Consequences” at the following link:
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&filenum=333- 213764&owner=exclude&count=40

Q: As a U.S. investor, will I receive a 1099 tax form or a K-1?

U.S. shareholders will receive 1099 tax forms for their investment in Enbridge Inc.

Q: Will there be a new company name and ticker for the new consolidated company?

No, the combined company will be called Enbridge Inc. and the shares will remain listed on the TSX and NYSE under the stock symbol ‘ENB’.

Q: I’m a Spectra Energy Partners’ unitholder – will there be any changes to my units?

Spectra Energy Partners’ unitholders should not expect any changes to the way they hold interest in SEP. SEP units will continue to trade on the NYSE under the symbol ‘SEP’.

Q: When will this transaction close?

The anticipated close date for the transaction is in the first quarter of 2017. The closing of the transaction is subject to shareholder approval from both companies, along with certain regulatory and government approvals, including, among others:

  • Compliance with the Hart-Scott-Rodino Antitrust Improvements Acts of 1976, as amended;
  • Approval under the Canada Competition Act;
  • Clearance from the Canadian Transportation Act and by the Committee on Foreign Investment in the United States; as well as
  • The satisfaction of other customary closing conditions.

More information is included in the final F-4 Proxy Circular/Prospectus found under “Certain U.S. Federal Income Tax Consequences” at the following link:
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&filenum=333-213764&owner=exclude&count=40

Q: As an Enbridge or Spectra shareholder what do I need to do regarding this transaction?

Information has been provided to each shareholder of Enbridge and Spectra in connection with the special shareholders meetings that are being held on December 15, 2016. Associated documents are posted, and will continue to be posted, on each of the companies’ websites and filed on SEDAR/EDGAR as required.

More information is included in the final F-4 Proxy Circular/Prospectus found under “Questions and Answer about the Merger and the Special Meeting” at the following link:
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&filenum=333-213764&owner=exclude&count=40