The Canada Pension Plan Investment Board has agreed to buy a 12% stake in the merged UK mobile networks O2 and Three for £1.1 billion, as investment in the UK by Canadian pension funds continues to soar.

The stake acquisition by CPPIB is part of a broader deal struck by Hutchison Whampoa - which on March 25 agreed to by O2 UK for £9.25 billion from telecommunications company Telefónica and plans to merge the business with its own Three subsidiary - to offlload a roughly one-third stake in the combined business to five institutional investors, according to a Hutchison statement on Friday.