June 17th, 2013:

Business› Companies

Donny Kwok and Denny Thomas in Hong Kong

Dutch acquisition marks the group’s second deal in waste management, after Australian private equity firm Ironbridge sold its New Zealand waste company to Cheung Kong Infrastructure

Cheung Kong (Holdings), controlled by Asia’s richest man Li Ka-shing, said it will buy Dutch waste processing firm RAV Water Treatment for 943.68 million euros (HK$9.8 billion), in an overseas expansion drive that has targeted infrastructure assets offering steady recurring income.

Li’s business empire, which spans property, telecoms, ports and retailing, has been seeking stable investment opportunities in well-regulated markets outside of Hong Kong, where its opportunities for expansion are becoming limited.

Other partners in the acquiring consortium include Hutchison Whampoa’s Cheung Kong Infrastructure Holdings, Power Assets Holdings and Li Ka Shing Foundation, according to a statement [1].

They are buying AVR-Afvalverwerking, owner of RAV Water Treatment I, which processes waste and supplies renewable energy from waste incineration in the Netherlands. ( http://www.vangansewinkelgroep.com/activities/energy-from-waste.aspx )

Cheung Kong Infrastructure, Hong Kong’s No. 2 property developer, and its investment arms have spent US$14.2 billion, including debt, buying assets globally over the past decade, according to Thomson Reuters data.

Last year, companies controlled by octogenarian billionaire Li agreed to buy British gas company Wales and West Utilities for US$1 billion. In 2010, Cheung Kong Infrastructure and Power Asset Holdings agreed to buy the British electricity distribution networks of France’s EDF for 5.8 billion pounds (HK$70.6 billion).

The Dutch acquisition marks the group’s second deal in waste management, after Australian private equity firm Ironbridge sold its New Zealand waste company, EnviroWaste Services Ltd, to Cheung Kong Infrastructure for NZ$501 million (HK$3.1 billion), including NZ$11 million in debt, in January.

Cheung Kong Holdings and Cheung Kong Infrastructure will each hold 35 per cent of the joint venture acquiring the Dutch company. Power Assets will hold 20 per cent and Li Ka Shing Foundation will own 10 per cent. The investment will be financed from internal resources.

Shares of Cheung Kong rose 3 per cent on Monday but are down more than 9 per cent since the start of the year. Hong Kong’s benchmark index was up 1.1 per cent on the day, but is down nearly 7 per cent for the year.

Among the other Li Ka-shing units involved in the deal, Cheung Kong Infrastructure gained 3.3 per cent, Power Assets was up 1.9 per cent and Hutchison climbed 2.6 per cent.

Reuters

Cheung Kong (Holdings)