Merger positions for future growth
Print Edition
HONG Kong billionaire Li Ka-shing said yesterday he will pay US$11.6 billion to merge his utilities firms in a bid to improve his vast business empire’s position for future expansion.
The 87-year-old’s latest move is the second reshuffle of his empire in a year, following the re-organization of his flagship Cheung Kong Hutchison Holdings announced in January.
His Cheung Kong Infrastructure said yesterday that it will offer US$11.6 billion to acquire all shares in Power Assets Holdings not already belonging to the firm.
CKI said it will offer 1.04 of its shares, valued at US$8.53 at yesterday’s close on the Hong Kong stock market, for each of the 1.3 billion Power Assets shares.
“The stronger balance sheet and significant cash balance will enable CKI to better compete for infrastructure projects given the capital intensive nature of the infrastructure industry,” it said in a statement filed to the Hong Kong stock exchange.
“The proposal will create a world class, diversified infrastructure investment platform that is significantly enhanced in terms of size and scale,” the company said.
CKI currently operates development, investment and infrastructure businesses on China’s mainland, the UK, Canada and other countries.
Li in January announced a sweeping reorganization of his businesses combining assets from multiple sectors under two new companies Cheung Kong Hutchison Holdings and CK Properties.
Li’s flagship CK Hutchison controls assets in telecoms, utilities, ports and other industries in over 50 countries and regions and reported a net profit of US$13.14 billion for the first six months of the year, the first earnings report since the reshuffle.
Li, who is nicknamed “Superman” for his sharp business acumen, had said that overhaul was to secure stability in future, while it was also seen as paving the way for him to hand over the reins to his elder son Victor, 51, after he retires.
During the same month, Li had also announced plans to buy UK phone giant O2 for up to US$15.4 billion.
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