Canadian Pacific (CP) has signed an agreement to buy complete ownership of the Detroit River Tunnel Partnership.

This partnership owns the immersed tube tunnel that runs for 2.6km and links Windsor in Canada with Detroit in the US.

At present, CP has a 16.5% stake in the partnership, with the remaining stake held by Ontario municipal employees’ pension investor OMERS.

The $312m deal is expected to complete at the end of the fourth quarter of 2020.

CP president and CEO Keith Creel said: “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.

“This strategic acquisition combined with our recent purchase of the Central Maine & Quebec Railway will further integrate the eastern part of our network and create value for our shareholders.”

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By GlobalData

OMERS Infrastructure senior managing director and head of Americas Michael Ryder said: “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.”

OMERS, which is one of Canada’s benefit pension funds with net assets of C$109bn, invested in the partnership in 2001.

The acquisition of the tunnel will cut down CP’s operating costs associated with movements through the tunnel.

TD Securities served as financial adviser to OMERS Infrastructure while Torys served as legal adviser.

OMERS has employees in Toronto and several important cities across North America, the UK, Continental Europe, Asia and Australia.