CALGARY, AB, Oct. 16, 2020 /PRNewswire/ - Canadian Pacific
(TSX: CP) (NYSE: CP) and OMERS, 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. 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 2.6-kilometre tunnel linking
Windsor and Detroit 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."
The transaction is currently expected to close at the end of Q4
2020 and remains subject to customary closing conditions, including
regulatory approvals.
Note on forward-looking information
This news release
contains certain forward-looking information and forward-looking
statements (collectively, "forward-looking information") within the
meaning of applicable securities laws. Forward-looking information
includes, but is not limited to, statements concerning
expectations, beliefs, plans, goals, objectives, assumptions and
statements about possible future events, conditions, and results of
operations or performance. Forward-looking information may contain
statements with words or headings such as "expect" and "will" or
similar words suggesting future outcomes. This news release
contains forward-looking information relating, but not limited to,
the success of CP's business, CP's operations, priorities and plans
and the anticipated purchase price, timing and success of the
Detroit River Tunnel transaction and its anticipated effect on CP
and its operating costs, customers and shareholders.
The forward-looking information contained in this news release
is based on CP management's current expectations, estimates,
projections and assumptions, and CP having regard to CP's
experience and its perception of historical trends, and includes,
but is not limited to, expectations, estimates, projections and
assumptions relating to: North American and global economic growth;
commodity demand growth; agricultural production; commodity prices
and interest rates; performance of CP's assets and equipment;
sufficiency of CP's budgeted capital expenditures in carrying out
CP's business plan; CP's ability to complete its capital and
maintenance projects on the timelines anticipated; applicable laws,
regulations and government policies; the availability and cost of
labour, services and infrastructure; the anticipated impacts of the
novel strain of coronavirus (and the disease known as COVID-19);
the fulfillment of closing conditions, including required
regulatory approvals, for the Detroit River Tunnel transaction and
the satisfaction by third parties of their obligations to CP.
Although CP believes the expectations, estimates, projections and
assumptions reflected in the forward-looking information presented
herein are reasonable as of the date hereof, there can be no
assurance that they will prove to be correct.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from those
expressed or implied by forward-looking information. By its nature,
CP's forward-looking information involves inherent risks and
uncertainties that could cause actual results to differ materially
from the forward looking information, including, but not limited
to, the following factors: changes in business strategies; general
North American and global economic, credit and business conditions;
risks associated with agricultural production, such as weather
conditions and insect populations; the availability and price of
energy commodities; risks associated with the Detroit River Tunnel
transaction, including the receipt of required regulatory approvals
and the satisfaction of the other closing conditions for the
transaction; the effects of competition and pricing pressures;
industry capacity; shifts in market demand; changes in commodity
prices; uncertainty surrounding timing and volumes of commodities
being shipped via CP; inflation; changes in laws, regulations and
government policies, including regulation of rates; changes in
taxes and tax rates; potential increases in maintenance and
operating costs; changes in fuel prices; uncertainties of
investigations, proceedings or other types of claims and
litigation; labour disputes; risks and liabilities arising from
derailments; transportation of dangerous goods; timing of
completion of capital and maintenance projects; currency and
interest rate fluctuations; effects of changes in market conditions
and discount rates on the financial position of pension plans and
investments; trade restrictions or other changes to international
trade arrangements; climate change; various events that could
disrupt operations, including severe weather, such as droughts,
floods, avalanches and earthquakes, and cybersecurity attacks, as
well as security threats and governmental response to them, and
technological changes; and the pandemic created by the outbreak of
the novel strain of coronavirus (and the disease known as COVID-19)
and resulting effects on economic conditions, the demand
environment for logistics requirements and energy prices,
restrictions imposed by public health authorities or governments,
fiscal and monetary policy responses by governments and financial
institutions, and disruptions to global supply chains. The
foregoing list of factors is not exhaustive. These and other
factors are detailed from time to time in reports filed by CP with
securities regulators in Canada
and the United States, including
with the Securities and Exchange Commission. Reference should be
made to "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Forward-Looking
Information" in CP's annual and interim reports on Form 10-K and
10-Q.
The forward-looking information contained in this news release
is made as of the date hereof. Except as required by law, CP
undertakes no obligation to update publicly or otherwise revise any
forward-looking information, or the foregoing assumptions and risks
affecting such forward-looking information, whether as a result of
new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific is a
transcontinental railway in Canada
and the United States with direct
links to major ports on the west and east coasts. CP provides North
American customers a competitive rail service with access to key
markets in every corner of the globe. CP is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise. Visit cpr.ca to see
the rail advantages of CP. CP-IR
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SOURCE Canadian Pacific