Duke Energy Completes Spin-off of Spectra Energy

Effective January 1, 2007, Duke Energy Corporation completed the spin-off of its wholly owned subsidiary Spectra Energy Corp. by way of distribution of all the shares of Spectra Energy to the shareholders of Duke Energy. The spin-off created a new public entity listed on the New York Stock Exchange with approximately US$21 billion in assets and a market capitalization of approximately US$18 billion. Spectra Energy is now a pure play natural gas midstream company operating in both the US and Canada. Spectra's Canadian operations include gathering, processing and pipeline transmission facilities in Western Canada; storage and distribution facilities in Ontario and pipeline transmission facilities in the Maritimes. The spin-off was undertaken in order to increase the value of the two former businesses of Duke Energy—the power business and the energy business.

In order to allow Canadian shareholders to participate in the spin-off on an equivalent basis, and without tax burdens, the share capital of Duke Energy Canada Exchangeco Inc. was reorganized to create two new classes of exchangeable shares, one exchangeable for shares of common stock of Duke Energy and one exchangeable for shares of common stock of Spectra Energy.

Duke Energy was represented by Robert T. Lucas III, Bruce Pydee and Kelly Stark-Anderson and by a team from McCarthy Tétrault LLP that included Richard Balfour, Salima Datoo, Brian Vick, John Osler, Patrick Boucher, Peter Goode and Sandy Gill (corporate and securities), Doug S. Ewens, Q.C., Jerald M. Wortsman, Sandra Mah, Robert Nearing and Catherine Gerrits (tax), Robin Sirett and Lorne Salzman (regulatory), and Warren Milman and Robert Cooper (court approvals).

Duke Energy was represented in the US by Skadden, Arps, Slate, Meagher & Flom LLP with a team comprised of Jeremy London, J.A. Glaccum and Gifford Carter (US corporate and securities), Jessica Hough, Cliff Gross and Kevin Nichols (tax), Michael Rogan and Stephen Hamilton (M&A), Clifford Naeve and Robert Warnement (energy project finance and development), Jose Esteves and Matthew Fagin (intellectual property & technology), Henry Eisenberg (environmental), David Schwartz (labour and employment), Michael Bergmann (employee benefits and executive compensation) and Bethany Haynes (corporate finance).