Two of Canada’s largest pension funds plan to buy Britain’s only high-speed rail link to the Channel Tunnel.
The infrastructure investment arm of the OMERS, Borealis Infrastructure, and Ontario Teachers’ Pension Plan (Teachers’) jointly entered into a binding contract today, Nov.5, for the rail line, dubbed HS1. The acquisition is valued at £2.1 billion.
“HS1 is a high-quality asset ideally suited to our investment criteria and we are extremely pleased that our bid was selected,” said Stephen Dowd, senior vice-president with Teachers’ infrastructure group. “HS1 will provide stable inflation-protected returns from proven and long-standing patronage levels, along with upside potential as the European Union moves to liberalize international rail travel. Teachers’ has positive experience operating major assets in the U.K. and HS1 further diversifies our global infrastructure portfolio.”
“This acquisition supports OMERS long-term strategy to diversify internationally and we view the U.K. and Europe as primary markets in meeting this objective,” said Michael Rolland, president and CEO of Borealis Infrastructure. “HS1 operates in an attractive and stable regulatory environment with good long term visibility on inflation linked cash flows.”
OMERS and Teachers’ could not comment further on the deal until it closes. A time line as to when that may be hasn’t been confirmed, although it’s expected to happen quickly.