Calgary-based Canadian Pacific Railway Ltd will be divesting the western part of its Dakota, Minnesota & Eastern or DM&E line to Greenwich, Connecticut-based Genesee & Wyoming Inc, Bloomberg reported. The report said that the deal, worth $210 million, would undo a purchase closed in 2008 to grow its coal business.

Citing a statement from both companies, the report said the deal covers 660 miles or 1,062 kilometers of track located mainly in the Midwest portion of the US. The sale is set to be completed by the middle of 2014. The decision of Canadian Pacific to divest a part of the line was said to have come after a strategic review of the firm, which was started a little over a year ago.

William Ackman's Pershing Square Capital Management, the largest shareholder of the railroad firm, said it was a mistake to buy the DM&E. Ackman had successfully campaigned to oust former Chief Executive Officer Fred Green who was replaced with the firm's current Chief Executive Officer Hunter Harrison, the report said.

Genesee & Wyoming said the purchase will increase yearly sales by $65 million. G&W operates 111 short-line railroads. This is the first acquisition of G&W since August 2012 when it bought RailAmerica Inc from Fortress Investment Group in a deal worth $1.39 billion. The purchase combined the two biggest regional rail operators in North America. In a November 12 presentation given to analysts and investors, G&W Chief Financial Officer Timothy Gallagher said the company was also evaluating deals in North America, Australia and Europe.

The statement said that a $240 million charge against its 2013 fourth quarter earnings because of the sale will be taken by Canadian Pacific.

When Canadian Pacific revealed the $1.48 billion acquisition of DM&E in September 2007, then CEO Green said the railroad had solid potential for growth. The railroad was originally meant to aid in the expansion of coal shipments but fossil fuel volumes had fallen as utilities shifted to cheaper natural gas, the report said.