May 11, 2001
the successful completion of the merger transaction with Midcoast
Energy Resources Inc. of Houston under which Enbridge acquired all
of the common stock of Midcoast for US $27 per share in cash. The
transaction was approved at a meeting of the Midcoast shareholders
held today with 81.6% of the outstanding Midcoast shares being
voted in favor of the merger. All necessary regulatory approvals
to the transaction have also been obtained.
"The acquisition of Midcoast Energy represents an important step
in expanding Enbridge's North American footprint and scale of
operations," said Enbridge President & Chief Executive Officer
Patrick D. Daniel. "It strengthens and diversifies our presence
in the U.S., expands the Company's position in the natural gas
business, and exposes Enbridge to new business opportunities in
the Gulf Coast and Mid-Continent regions."
The total consideration for the shares is approximately US $350
million, which was financed through Enbridge's existing credit
capacity. Enbridge also assumed approximately US $250 million of
Midcoast's long-term debt (net of cash), resulting in a total
transaction value of US $600 million, or approximately Cdn. $900
million.
Midcoast is a Houston-based pipeline company with regional offices
in Texas, Alabama, Kansas, Louisiana, Mississippi and Alberta.
The company transports, gathers, processes and markets natural gas
and other petroleum products through over 80 company-owned
pipelines covering approximately 4,100 miles in 10 states, the
Gulf of Mexico and Canada.
Enbridge plans to reorganize its Transportation Group to take full
advantage of the Midcoast acquisition, to maximize the
effectiveness of the Company's growing presence in the U.S., and
to position Enbridge for even greater growth there.
Effective immediately, J. Richard Bird becomes Group Vice
President, Transportation Group North. He will have
responsibility for all energy transportation operations in Canada,
including Enbridge Pipelines and its related liquids pipelines
operations, and midstream investments. He will also be
responsible for Enbridge's investments in the Alliance and Vector
natural gas pipelines.
Also effective immediately, Dan C. Tutcher is appointed Group Vice
President, Transportation Group South. He will have overall
responsibility for Enbridge's U.S. businesses, including Lakehead
Pipe Line and Midcoast Energy, which has been renamed Enbridge
Midcoast Energy. It is the intention of the Lakehead Board of
Directors to appoint Mr. Tutcher President of Lakehead Pipe Line
Company, Inc. effective June 1, 2001, succeeding Mr. Bird. Mr.
Tutcher was previously Chairman of the Board, President and Chief
Executive Officer of Midcoast from its formation in 1992.
Mr. Bird will retain operational and development responsibility
for the existing assets of Lakehead, which will continue to be
operated and expanded on an integrated basis with Enbridge's
Canadian pipelines.
Consistent with the "One Company, One Vision" strategy, Enbridge
intends to consolidate the Lakehead and Midcoast businesses under
the Enbridge brand name. It is expected that the U.S. operations
will be renamed later this year.
Enbridge Inc. is a leader in energy transportation, distribution
and services. As a transporter of energy, Enbridge operates, in
Canada and the U.S., the world's longest crude oil and liquids
pipeline system. The Company also is involved in international
energy projects and has a growing involvement in natural gas
transmission and midstream businesses. As a distributor of
energy, Enbridge owns and operates Canada's largest natural gas
distribution company, which provides gas to 1.5 million customers
in Ontario, Quebec and New York State. The Company is developing
a gas distribution network for the province of New Brunswick, and
is involved in the distribution of electricity. In addition,
Enbridge provides retail energy products and services to a growing
number of Canadian and U.S. markets. The Company employs
approximately 5,500 people, primarily in Canada, the U.S. and
South America. Enbridge common shares trade on the Toronto Stock
Exchange in Canada under the symbol "ENB" and on the NASDAQ
National Market in the U.S. under the symbol "ENBR". Information
about Enbridge is available on the Company's web site at
This news release includes forward-looking statements regarding
future events and the future financial performance of Enbridge.
All forward-looking statements are based on Enbridge's beliefs as
well as assumptions made by and information currently available to
Enbridge. When used herein, words such as "believes," "expects,"
"intends," "forecasts," "projects," and similar expressions,
identify forward-looking statements. These statements reflect
Enbridge's current views with respect to future events and are
subject to various risks, uncertainties and assumptions pertaining
to operating performance, regulatory parameters, commodity prices,
weather and economic conditions and, in the case of pending and
proposed projects, risks relating to design and construction,
regulatory processes, financing and performance of other parties,
including partners, contractors and suppliers and other risks
discussed in Enbridge's regulatory filings, including its Annual
Information Form and Annual Report for the year ended December 31,
2000. If one or more of these risks or uncertainties materialize,
or if the underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking
statement. Except as required by applicable securities laws,
Enbridge does not intend to update these forward-looking
statements.