CALGARY, ALBERTA--January 28, 2002-Enbridge today announced that
it has agreed to sell its retail energy services business to
Centrica North America, a division of Centrica plc, a U.K.-based
energy services firm, for Cdn$1 billion in cash. The sale involves
the retail energy products and services businesses of Enbridge,
including an estimated 1.3 million water heater rental units and
14 retail outlets in southern Ontario, the Company's energy
services operations in Philadelphia, some parts of the Enbridge
Services business in B.C., and more than 1,400 employees.
Enbridge will record a net gain on the sale of energy services of
approximately $210 million, after taxes and other costs, upon
completion of the transaction. The net proceeds from the sale will
be used for strategic growth and debt reduction.
Patrick D. Daniel, Enbridge President & Chief Executive Officer,
said, "The sale of the retail energy services business is in
keeping with our strategy to focus on our core asset management
businesses. Although energy services continues to offer potential
for growth, re-deployment of these funds into liquids pipelines,
gas distribution or gas transmission opportunities that allow us
to increase our North American footprint makes more sense for our
shareholders. The sale proceeds reflect the value Enbridge has
created in growing this business in a deregulated environment."
Mr. Daniel added, "The sale also increases our flexibility to
capitalize on infrastructure growth opportunities. Our plans are
to invest roughly $5 billion in capital over the next five years.
And although we have a large and growing base of operating cash
flow, the sale of non-strategic assets is an effective way of
financing opportunities that we think will high-grade our asset
base and profitability. We are also confident that Centrica will
continue the record of care and service to which our customers are
accustomed."
"The acquisition is an important step in Centrica's goal of
becoming the leading provider of energy and energy-related
products in North America," said Deryk King, Chief Executive
Officer of Centrica North America. "Through this transaction we
will be able to augment and enhance our already significant
presence in Toronto, which is the hub for all our North American
customers."
The bulk of the retail energy services business was unbundled from
Enbridge Consumers Gas, Canada's largest natural gas distribution
utility, in 1999. Since that time, Enbridge has increased the
value of the franchise and responded to customers' energy services
needs in southern Ontario.
Enbridge retains all rights to the Enbridge brand, and Enbridge
Consumers Gas, its operations and customer base will continue to
be owned by Enbridge Inc. Enbridge will also retain its customer
support businesses, through its interest in CustomerWorks Limited
Partnership. Centrica has agreed to use the services of
CustomerWorks for a period of four years.
The sale is subject to Investment Canada and Competition Bureau
approval and is expected to close in the second quarter of 2002.
The more than 1,400 Enbridge Home and Business Services employees
will continue to be employed by Centrica. "We thank all of them
for their hard work," said Mr. Daniel, "and wish them continued
success under the new ownership."
Enbridge Inc. is a leader in energy transportation and
distribution in North America and internationally. As a
transporter of energy, Enbridge operates, in Canada and the U.S.,
the world's longest crude oil and liquids transportation system.
The Company also is involved in international energy projects and
has a growing involvement in the natural gas transmission and
midstream businesses. As a distributor of energy, Enbridge owns
and operates Canada's largest natural gas distribution company,
which provides distribution services in Ontario, Quebec and New
York State; and is developing a gas distribution system for the
province of New Brunswick. The Company employs approximately 6,000
people, primarily in Canada, the U.S. and South America. Enbridge
common shares trade on The Toronto Stock Exchange in Canada and on
The New York Stock Exchange in the U.S., under the symbol ENB.
Information about Enbridge is available on the Company's web site
at www.enbridge.com.
Since its formation in 1997, Centrica plc has developed into a
leading provider of energy and other essential services. In the
U.K., Centrica offers energy supply and related products under the
British Gas brand, roadside services from the AA, financial
services through the AA and Goldfish brands and telecoms products
under the One.Tel brand. The group's strategy of international
expansion took a significant step forward in August 2000 with the
acquisition of Toronto-based Direct Energy, North America's
largest unregulated retailer of natural gas. Centrica is also
active in six states in the U.S. through the Energy America brand,
which it acquired in January 2001. Centrica currently supplies gas
to 1.3 million customers across North America under the Direct
Energy and Energy America brands, making it the largest
unregulated energy supplier. In addition, 600,000 customers have
already signed up with Direct Energy in anticipation of the
opening of the Ontario electricity market in May 2002. In June
2001, Centrica also assumed full ownership of GreenSource Limited,
a company providing access to a network of private gas servicing
and installation contracting firms in Ontario. This provided an
opportunity to begin to replicate Centrica's U.K. model in
Ontario, launching home services in support of its energy
business.
Enbridge will hold a conference call regarding this announcement
at 6:45 a.m. Mountain time today (8:45 a.m. Eastern time). The
call will be broadcast live on the Internet and can be accessed at
www.enbridge.com/investor. A replay will be available shortly
thereafter.
When used in this news release, the words "anticipate", "expect",
"project", "believe", "estimate", "forecast" and similar
expressions are intended to identify forward-looking statements,
which include statements relating to pending and proposed
projects. Such statements are subject to certain risks,
uncertainties and assumptions pertaining to operating performance,
regulatory parameters, weather and economic conditions and, in the
case of pending and proposed projects, risks relating to design
and construction, regulatory processes, obtaining financing and
performance of other parties, including partners, contractors and
suppliers.
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