CALGARY, AB – 16.October – Canadian Pacific and OMERS Infrastructure , the defined benefit pension plan for municipal employees in the province of Ontario, announced today they have entered into a purchase agreement whereby CP will acquire full ownership of the Detroit River Rail Tunnel from certain affiliates of OMERS Detroit River Tunnel Partnership. The purchase price for the transaction is approximately US$312 million subject to customary closing adjustments.
CP previously owned a 16.5 percent stake of the tunnel in partnership with OMERS. The 1.6-mile tunnel under the Detroit River linking Windsor, ON and Detroit, MI will continue to be operated by CP. The acquisition of the tunnel will reduce CP’s operating costs related to movements through the tunnel.
“This is an important corridor for CP and by taking full ownership, we can better operate the asset to the benefit of our customers and the North American supply chain,” said CP President and CEO Keith Creel. “This strategic acquisition combined with our recent purchase of the CMQ will further integrate the eastern part of our network and create value for our shareholders.”
“OMERS first invested in the Detroit River Tunnel Partnership in 2001. We are very proud of the value we have created with this investment for OMERS members,” said Michael Ryder, Senior Managing Director and Head of Americas for OMERS Infrastructure. “Our work with CP represents a strong example of our global investment approach in action – collaborating with a trusted strategic partner as long-term owners and developers of a major international transportation link.”
“It has been a pleasure to work with the CP team to ensure safe, reliable operations of this important infrastructure asset for commercial users and regional stakeholders,” said Peter Gray, Director, OMERS Infrastructure. “We sincerely thank CP for its partnership, and we wish them continued success.”
The transaction is currently expected to close at the end of Q4 2020 and remains subject to customary closing conditions, including regulatory approvals.