Heir to Li Ka-shing Plans to Spend USD10 Bln to Acquire Australia's Gas Pipeline Firm APA
Liao Shumin
/SOURCE : Yicai
Heir to Li Ka-shing Plans to Spend USD10 Bln to Acquire Australia's Gas Pipeline Firm APA

(Yicai Global) June 14 -- Victor Li Tzar-kuoi showed his intentions to expand business presence in Australia only one month after he took over the reins of Hong Kong conglomerate CK Hutchison Holdings from his billionaire father Li Ka-shing as he plans to realize the group's possibly biggest ever overseas acquisition.

CK Asset Holdings, CK Infrastructure Holdings, and Power Assets Holdings announced to form a consortium to acquire all of the existing issued shares of APA Group, an Australian natural gas pipeline operator, for a transaction value of approximately AUD13 billion (USD10 billion), Hong Kong daily Ta Kung Pao reported.

The proposal to acquire APA is a non-binding one subject to a number of pre-conditions, including due diligence review and approvals from relevant shareholders and government agencies.

"At present, the proposal for the acquisition is still at a preliminary stage, and the transaction may or may not be undertaken," said Edmond Ip, deputy managing director of CK Hutchison Holdings, and deputy managing director and member of the executive committee of CK Asset Holdings.

The consortium proposes to acquire the shares at AUD11 per share in cash, a premium of approximately 33 percent compared to APA's closing price of AUD8.27 before the announcement of the proposal. After the announcement, APA's shares rose by more than 20 percent to AUD10.23 yesterday.

APA, which is listed on the Australian Stock Exchange, is the largest natural gas infrastructure firm in the country and currently owns or manages and operates a portfolio of energy assets in excess of USD20 billion. Its business includes natural gas transmission. It has built 7,500 kilometers of pipelines on the East Coast of Australia and also operates about 3,500 kilometers of natural gas pipelines in western Australia, public data show.

CK Hutchison Holdings has actively pursued mergers and acquisitions opportunities overseas in recent years. In April, it signed an agreement with Sri Lankan mobile operator Etisalat Group to merge their mobile businesses in Sri Lanka.

In August last year, the Hong Kong conglomerate spent USD435 million to acquire the refineries in Midwest US through Husky Energy.

In July last year, CK Hutchison Holdings and CK Infrastructure purchased Ista, a German measurement and energy management group, for approximately EUR4.5 billion (USD5.3 billion). It also acquired Reliance, a Canadian construction equipment supplier, for CAD2.8 billion (USD2.1 billion) last year.

Editor: Mevlut Katik

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Keywords: CK Hutchison Holdings , APA Group , Australia , Natural Gas Pipelines