Engie set to acquire UK Power Networks from CK Group for $14.2 billion. French firm Engie is poised to purchase UK Power Networks for an equity valuation of £10.5 billion (roughly $14.2 billion) from CK Group, owned by Hong Kong businessman Li Ka-shing.
The transaction assigns UK Power Networks an enterprise valuation of about £15.8 billion — around 10 times its projected adjusted EBITDA for 2027, Engie revealed on Wednesday.
Following completion of the acquisition, the UK will rise to become Engie’s second largest market.
Affiliates of Hong Kong-based CK Group released specifics of the transaction in separate statements. Power Assets, possessing a 40% stake in UK Power Networks, anticipates realizing a profit of HK$10.7 billion (approximately $1.37 billion) from the divestiture. Developer CK Asset, selling its 20% holding, forecasts a profit of HK$8.4 billion.
CK Infrastructure indicated its expectation of a HK$14.5 billion profit from the disposition of its 40% ownership, encompassing the influence of its 36% stake in Power Assets.
The parent entity, CK Hutchison, is anticipated to register comparable earnings.
Shares of four firms traded in Hong Kong witnessed an increase on Thursday after the deal was made public: Power Assets gained 4.2%, CK Asset — 1.9%, CK Infrastructure — 5.2%, CK Hutchison — 3.1%.
Engie intends to fund the acquisition using approximately 5 billion euros ($5.9 billion) in debt and hybrid securities, coupled with an asset disposal initiative targeting approximately 4 billion euros by 2028. Moreover, the corporation intends to accumulate up to 3 billion euros through an accelerated share placement to uphold its investment grade credit rating.
Engie stated that the transaction would broaden its footprint in the UK and produce an immediate favorable outcome on financial performance, becoming accretive in the first complete year following its conclusion.
“This acquisition will reinforce the group’s expansion pathway and lower our risk profile, affording enhanced predictability for future income,” remarked Engie CEO Catherine MacGregor.
The arrangement necessitates endorsement from stockholders of the three companies and parent CK Hutchison, in addition to regulatory authorities.
The closure is projected to occur later in the current year.
Source: Reuters