Li Ka-shing sheds key UK power asset in makeover for new era

HONG Kong billionaire Victor Li’s CK Group has agreed to sell the UK’s largest power-distribution network, as flagship conglomerate CK Hutchison Holdings eyes asset divestments to reshape the business for a geopolitically fraught era.

Unit CK Infrastructure Group said that it expects an effective gain of about HK$14.5 billion (S$2.3 billion) from transactions related to the £10.5 billion (S$18 billion) sale of UK Power Networks to French utility Engie, according to a Thursday (Feb 26) stock exchange filing. The proceeds will allow it to generate cash for future investments or acquisitions, the company said.

CK Hutchison shares rose as much as 3.7 per cent in Hong Kong, the most in three weeks.

The deal fits into a broader rethink of the storied company’s portfolio, which includes asset sales and potential spinoffs. The moves could ultimately reshape the empire founded by Li Ka-shing, whose emphasis on stable and predictable returns saw him build his fortune by investing in regulated infrastructure and telecom assets in developed Western markets.

But Li’s elder son Victor, who has chaired the group since 2018, must now steer the company through a more volatile landscape marked by increasing trade tensions and the disruptive rise of artificial intelligence.

“From a credit perspective, the deal is positive as it could improve CK Hutchison’s leverage by as much as 0.5x and gives the company firepower to pursue acquisitions,” said Bloomberg Intelligence credit analyst Sharon Chen.

CK Hutchison is also considering listing its health and beauty retailer AS Watson Group, Bloomberg News reported in November.

The power asset sales comes as CK Hutchison’s proposed sale of 43 global ports grows more complicated.

Panama this week moved to occupy two of the company’s facilities near the Panama Canal, assets that have become a flashpoint in US-China tensions. Talks with a buyer consortium that includes US investment firm BlackRock and China Cosco Shipping have dragged on for months, underscoring the political sensitivities surrounding the transaction.

SEE ALSO

CK Hutchison says Panama Canal port workers removed after court-ordered takeover

CK’s sale of its UK power asset has been long in the making, and in 2022, it held talks with a consortium led by Macquarie Group and KKR. UK Power Networks is owned by CK Infrastructure Holdings and Power Assets Holdings, which each hold 40 per cent. CK Asset Holdings owns the remaining 20 per cent, according to the company’s website.

For Engie, the deal boosts its UK presence as the nation rushes to expand its grid to meet surging demand from renewables, electric vehicles and data centres. The company will gain control of a regulated asset that serves about 8.5 million customers in London and southeast England.

The transaction is expected to close in mid-2026. BLOOMBERG