Enbridge Announces Strategic Acquisition of Three U.S. Based Utilities to Create Largest Natural Gas Utility Franchise in North America

Enbridge Inc., September 6, 2023

Enbridge Inc. ("Enbridge" or the "Company") (TSX: ENB) (NYSE: ENB) today announced that it has entered into three separate definitive agreements with Dominion Energy, Inc. to acquire EOG, Questar, and PSNC for an aggregate purchase price of US$14.0 billion (CDN$19 billion), comprised of $US9.4 billion of cash consideration and US$4.6 billion of assumed debt, subject to customary closing adjustments.

Upon the closings of the three transactions, Enbridge will add gas utility operations in Ohio, North Carolina, Utah, Idaho and Wyoming, representing a significant presence in the U.S. utility sector. The Gas utilities fit Enbridge's long held investor proposition of low-risk businesses with predictable cash flow growth and strong overall returns. Following the closings, the Acquisitions will double the scale of the Company's gas utility business to approximately 22% of Enbridge's total adjusted EBITDA and balance the Company's asset mix evenly between natural gas and renewables, and liquids. The Acquisitions will lower Enbridge's already industry-leading business risk and secure visible, low-risk, long-term rate base growth. Increased utility earnings enhance Enbridge's overall cash flow quality and further underpin the longevity of Enbridge's growing dividend profile.

Following the closings of the Acquisitions, Enbridge's gas utility business will be the largest, by volume, in North America with a combined rate base of over CDN$27 billion and about 7,000 employees delivering over 9 Bcf/d of gas to approximately 7 million customers.

The Company estimates its purchase price for the Acquisitions at ~1.3x Enterprise Value-to-Rate Base (based on 2024 estimates) and ~16.5x Price-to-Earnings (based on 2023 estimates) and expects the Acquisitions to be accretive to Enbridge's financial DCFPS and adjusted EPS outlook in the first full year of ownership adding shareholder value.

"Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once in a generation opportunity. The transaction is expected to be accretive to DCFPS and adjusted EPS in the first full year of ownership, increasing over time due to the strong growth profile," said Greg Ebel, Enbridge President and CEO. "Following the closings of the Acquisitions, our Gas Distribution and Storage ("GDS") business will be North America's largest gas utility franchise. These Acquisitions further diversify our business, enhance the stable cash flow profile of our assets, and strengthen our long-term dividend growth profile.  The transaction also reinforces our position as the first-choice energy delivery company in North America.

"The assets we are acquiring have long useful lives and natural gas utilities are 'must-have' infrastructure for providing safe, reliable and affordable energy.  In addition, these gas utilities have each committed to achieving net-zero greenhouse gas emissions by 2050 and are expected to play a critical role in enabling a sustainable energy transition. We are very excited by today's announcement as these businesses align with Enbridge's business risk model and long-term growth targets. The entire Enbridge team is committed to working with the EOG, Questar and PSNC teams and to investing in the communities they serve.  We look forward to serving our customers with dedication and to providing them with safe, reliable, and affordable energy service for years to come."

The Gas utilities are domiciled in premier U.S. jurisdictions with transparent and constructive regulatory regimes that preserve customer choice to consume natural gas and have attractive capital growth programs. EOG, Questar and PSNC each have lower-carbon initiatives that are similarly aligned with Enbridge's ESG goals.

Each of the Gas utilities have an excellent operating and safety track record. The experienced operating teams of each business will be joining the Enbridge team. Keeping with Enbridge's history of successfully integrating acquired businesses, we expect to be able to integrate the Gas utilities' businesses smoothly while continuing to deliver the service our customers expect.

"Today and for the long-term, natural gas will remain essential for achieving North America's energy security, affordability and sustainability goals. Individually and collectively, the Gas utilities are perfectly complementary to our gas distribution business unit's current operations and strategy. These utilities operate in regions with very attractive regulatory regimes, offer diverse, low-risk growth opportunities, and are capital efficient with short cycles between capital deployments and earnings generation," said Michele Harradence, President of GDS and Executive Vice President at Enbridge. "We are excited to be welcoming over 3,000 new employees into the Enbridge family.  In addition, we intend to continue the robust social, community and diversity, equity and inclusion initiatives that each Gas utility has committed to."

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