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Hong Kong conglomerate to buy TPG-backed Alinta

The deal, said to value the Australian utility at more than $3bn, marks the Cheng family's debut investment in the energy sector Down Under.

Chow Tai Fook Enterprises, a Hong Kong-based conglomerate best known for its jewellery retail business, has agreed to acquire 100 percent of Alinta Energy, an Australian utility owned by a group of hedge funds and private equity investors.

The transaction value was not disclosed but reports said CTFE will pay more than A$4 billion ($3.1 billion; €2.87 billion) to Alinta's investors including US buyout firm TPG Capital.

The Sydney-headquartered utility owns and operates a power generation portfolio of nearly 2GW, serving about 800,000 of combined electricity and gas retail customers across Australia and New Zealand.

Having signed a binding agreement with Alinta's shareholders, CTFE is now seeking approval from the Foreign Investment Review Board as part of “standard conditions” to complete the deal, Alinta said.

CTFE is a private holding company owned and controlled by the family of Hong Kong tycoon Cheng Yu-tung, who passed away last September. While its interests span property development and investment, hospitality, infrastructure, aircraft leasing, department stores, jewelleries and other retail businesses, the four Hong Kong-listed companies it controls include construction firm New World Development and its infrastructure arm NWS Holdings.

The company has “significant investments” in Australia in real estate and integrated resorts, but Alinta will be its first investment in the energy sector Down Under, according to the latter. Describing the acquisition as “highly strategic”, CTFE said it intends to grow the business by pursuing accretive investments in the Australian energy market. 

The latter has recently attracted other infrastructure investors from Hong Kong, including tycoon Li Ka-shing. Cheung Kong Infrastructure, the infrastructure investment arm controlled by Li's family, in January secured shareholder approval for acquiring the DUET Group, an Australian energy asset manager for A$7.4 billion.