Hong Kong billionaire Li Ka-shing is to buy UK power grids from France's EDF for 5.8 billion pounds ($9.1 billion), the biggest full European acquisition by a North Asian group. The tycoon's investment vehicles Cheung Kong Infrastructure (CKI) and Hongkong Electric (HKE) said they would buy three British electricity distribution networks and a private power networks business from EDF, the world's second-largest utility.
The sale to the octogenarian Li, ranked by Forbes as the world's 14th richest man, in one leap comfortably beats EDF's 5 billion euro ($6.5 billion) target for asset sales to cut debt. Martin Young, an analyst at Nomura in London, said EDF had achieved "a very good price indeed, in this day and age", with the company touting a 27 percent premium to the end-March "regulated asset base" (RAB) value ascribed to the networks.
The purchase caps a process that has dragged on for more than a year, delayed by a change in EDF management, British regulatory rulings, and difficulties with pension trustees. Analysts said the deal would double CKI's presence in the United Kingdom, helping to overcome its limited room for domestic growth. CKI already invests in Britain's gas and water industries and owns utility businesses in Australia, Canada and New Zealand.