Caisse de depot et placement du Quebec (CDPQ) and Hermes Infrastructure have agreed to acquire the UK Government's 40% stake in the Channel Tunnel express train operator Eurostar Group Ltd.

Under the terms of the agreement CDPQ and Hermes will pay £585.1 million (896.8 million). In addition, Eurostar Group will redeem the Government's preference share, raising about £172 million (US$263.6 million).

The transaction is part of a £20 billion (US$30.7 billion) privatization push to reduce the UK's debt. The Chancellor George Osborne stated:

"Investing in the best quality infrastructure for Britain, getting the best value for money for the taxpayer and tackling our country's debts are key parts of our long term economic plan, and in today's agreement, we are delivering on all three".

Other teams that bid for Eurostar Group were: Singapore's state-backed investment fund GIC, China Investment Corporation (CIC) and  a team composed by UK private equity firm 3i infrastructure and French life insurance fund Predica.

National railway company of France (SNCF), the French majority shareholder, ruled itself out as a bidder in October. Eurostar International Limited (EIL) is owned by SNCF (55%), London and Continental Railways -UK Government-owned company- (40%) and the state-owned Belgian company, SNCB, owns the remaining 5%.

Eurostar is a high-speed railway service connecting London with Paris and Brussels. All its trains traverse the Channel Tunnel between the United Kingdom and France, owned and operated separately by Eurotunnel. It carried more than 10 million passengers in 2013.

Eurostar has become the dominant operator in cross-channel intercity passenger travel on the routes that it operates, carrying more passengers than all airlines combined.

The UK Government put its 40 % stake up for sale back in December 2013. In June 2014, the UK shareholding in Eurostar International Limited (40%) was transferred from London and Continental Railways / Department for Transport to HM Treasury. The UK government hired UBS in October this year to run the sale process. First-round bids were accepted on 8 December 2014.