Pembina Pipeline Corporation (TSX:PPL) entered into an agreement to acquire Inter Pipeline Ltd. (TSX:IPL) for CAD 8.4 billion on May 31, 2021. Under the terms of the transaction, Inter Pipeline shareholders will receive 0.5 Pembina share for each share of Inter Pipeline that they own. The transaction will result in the acceleration of the vesting of all IPL RSUs and IPL PSUs granted in 2019 and such IPL RSUs and IPL PSUs will be settled in cash immediately prior to the effective time based on the IPL VWAP, and in the case of such IPL PSUs, using a "Performance Multiplier" of 1.0 as agreed to by Inter Pipeline and Pembina. The vesting of the IPL RSUs and IPL PSUs granted in 2020 and 2021 under the IPL Incentive Award Plans will be accelerated and settled in cash immediately prior to the Effective Time based on the IPL VWAP, and in the case of such IPL PSUs, using a "Performance Multiplier" of 1.0 as agreed to by Inter Pipeline and Pembina. Pembina and Inter Pipeline shareholders are expected to own 72 percent and 28 percent of the combined company, respectively. In case of termination by Inter Pipeline, a fee of CAD 350 million will be paid to Pembina. The Arrangement Agreement also provides for the payment by Pembina of a reverse termination fee of CAD 350 million if the Arrangement Agreement is terminated in specified circumstances where approval of the Transaction under the Competition Act (Canada) has not been received.

The combined entity will continue to be led by Pembina's senior executive team. Representation from Inter Pipeline on Pembina's Board of Directors will be determined prior to closing of the transaction. The transaction is subject to Inter Pipeline and Pembina shareholder approval, regulatory approvals, listing/approval of new shares on stock exchange, antitrust approvals, execution of dissident's rights, as well as the approval of the Court of Queen's Bench of Alberta. The issuance of Pembina common shares pursuant to the transaction is subject to the approval by a majority of votes cast by holders of Pembina common shares at a meeting of Pembina shareholders. The Board of Directors of each of Pembina and Inter Pipeline have unanimously approved the transaction. Board of Directors of Inter Pipeline unanimously recommends that shareholders support the strategic share-exchange transaction with Pembina Pipeline Corporation. As per filing on June 7, 2021 Pembina cautioned Inter Pipeline shareholders not to tender their shares to Brookfield Infrastructure Partners opportunistic, hostile offer that would deny them the significant potential upside of a combined company, while also creating tax exposure. As of July 5, 2021, Inter Pipeline and Pembina shareholders' meetings will be held on July 29, 2021 and all of the Directors and executive officers of Inter Pipeline who collectively hold approximately 0.32% have entered into agreements with Pembina to support the transaction. As of July 6, 2021, the board of Directors of both companied recommends shareholders to vote in favor of the transaction at the special meetings of shareholders. Alberta Securities Commission (the "ASC") stated that Brookfield's use and disclosure relating to the total return swap was clearly abusive to the Inter Pipeline shareholders and the capital market, and as such contrary to the public interest. The ASC ordered Brookfield to enhance its disclosure regarding Brookfield's use of total return swaps and also raised the minimum tender condition for Brookfield's unsolicited bid to 55 percent from 50 percent of the shares tendered by shareholders other than Brookfield and persons acting jointly or in concert with it. The ASC dismissed Brookfield's applications to cease-trade Inter Pipeline's supplemental shareholder rights plan and the Pembina arrangement, deciding that the Inter Pipeline Board of Directors (the "Inter Pipeline Board") had not used improper defensive tactics. The ASC has upheld the break fee that may be paid by IPL to Pembina under that arrangement in certain circumstances. As of July 23, 2021, Brookfield Infrastructure agrees with the recommendation from another leading independent proxy advisor, Glass Lewis, that Inter Pipeline Ltd. shareholders vote against IPL's proposed transaction with Pembina Pipeline Corporation. The Inter Pipeline Board also unanimously recommends that shareholders reject the unsolicited takeover offer from Brookfield. To reject the Brookfield offer, simply take no action with respect to it. The Transaction is expected to close in the fourth quarter of 2021. As of July 5, 2021, the transaction is anticipated to be completed late in the third quarter or early in the fourth quarter of 2021. The transaction is expected to immediately contribute to meaningful adjusted cash flow per share accretion upon closing.

Scotia Capital acted as financial advisor to Pembina and has provided a fairness opinion to the Pembina Board of Directors. Chad Schneider and Jeff Bakker of Blake, Cassels & Graydon LLP acted as legal advisors to Pembina. TD Securities acted as financial advisor to Inter Pipeline and has provided a fairness opinion. J.P. Morgan Securities Canada Inc acted as financial advisor to the special committee of the Board of Directors of Inter Pipeline and has provided a fairness opinion. Bill Maslechko and James Kidd of Burnet, Duckworth & Palmer LLP and Dentons Canada LLP acted as legal advisors to Inter Pipeline, its Board of Directors, and the special committee. Computershare Trust Company of Canada acted as Depository for Inter Pipeline. Computershare Trust Company of Canada acted as transfer agent to Pembina. Kingsdale Advisors acted as information agent to Inter Pipeline and Pembina and will receive a fee of CAD 0.09 million from both Inter Pipeline and Pembina. Credit Suisse acted as financial advisor to Inter Pipeline.

Pembina Pipeline Corporation (TSX:PPL) cancelled the acquisition of Inter Pipeline Ltd. (TSX:IPL) effective July 25, 2021. In connection with the termination, Inter Pipeline has agreed to pay Pembina the CAD 350 million termination fee provided for in the agreement. The transaction has been terminated after Inter Pipeline receiving Brookfield Infrastructure's enhanced offer. Inter Pipeline's Board of Directors will not be reconfirming its recommendation that shareholders of Inter Pipeline vote in favour of the Pembina arrangement. Inter Pipeline has retained TD Securities Inc. and the Special Committee has retained J.P. Morgan Securities Canada Inc. as financial advisors. Burnet, Duckworth & Palmer LLP and Dentons Canada LLP are acting as legal advisors to Inter Pipeline and its Board of Directors.