Cheung Kong Infra to go big on ‘capital-intensive’ deals

The Hong Kong firm is on the hunt for further growth opportunities following its groundbreaking acquisition of Australia’s Duet Group.

Just months after completing one of the year’s largest deals in Australia, Cheung Kong is keen to demonstrate it has appetite for more.

“Sizeable capital-intensive deals are of particular interest to us,” said Victor Li, chairman of Hong Kong-listed Cheung Kong Infrastructure, in its interim report released yesterday. 

The pursuit of further growth opportunities follows the firm’s successful acquisition of Australia’s Duet Group for A$7.4 billion ($5.9 billion; €5 billion), which completed in May. 

Power Assets, another affiliate of CK Group, a holding controlled by Hong Kong tycoon Li Kashing, displayed similar ambitions in its interim report but added that it looks for “high-quality investments in a diversified range of stable, well-regulated energy markets”. 

CKI noted its purchase of 40 percent of Duet was the largest acquisition it ever made. Its associate companies, Cheung Kong Property Holdings and Power Assets, also took part, buying 40 percent and 20 percent of the Australian firm respectively. 

The readiness of CK associate companies to form joint ventures when targeting large-scale assets gives them a “unique competitive edge”, Li said. “This is most beneficial to us in the diversification and management of risks and reward, mitigating our exposure in any particular investment.” 

The firm’s attempts to buy Australian assets has not always proved successful. Last year, CKI was one of two Chinese parties barred from bidding for Ausgrid by the government on national security grounds. The power network was subsequently bought by a consortium of IFM Investors and AustralianSuper.

With net assets of about HK$109 billion ($14 billion; €12 billion), CKI’s portfolio includes water, energy and transport assets spanning the UK, continental Europe, Australia, China, Hong Kong, Canada and New Zealand.