Hong Kong tycoon Li Ka-shing’s family consortium has sold UK Power Networks (UKPN), the operator of British electricity infrastructure, to a French electric company for £10.5 billion (HK$176.8 billion) amid the ongoing power play in the Panama Canal ports between the United States and China.
According to a joint announcement on Thursday (February 26) by the CK Group, controlled by the Li family, the consortium’s companies – CK Infrastructure (CKI), CK Hutchison (CKH), Power Assets, and CK Asset – have agreed to sell all their shares in UKPN to the French electric company Engie for £10.5 billion. The deal is expected to be completed by mid-2026, subject to regulatory approval.
UKPN is responsible for electricity distribution in London and other parts of the UK, and it was acquired by the Li Ka-shing family consortium back in 2010.
The joint announcement emphasized the significant growth of UKPN under its management. The group stated that now is an opportune time to cash in on attractive valuation investment projects, allowing for significant accounting gains and cash which can be used for future investments or acquisitions.
When the CK Group acquired UKPN in 2010, it was for nearly £5.8 billion, and this current equity sale price is at £10.5 billion, nearly doubling the value.
According to reports in the Hong Kong media, the current market value of UKPN is £16.838 billion, and with the Li Ka-shing family having received dividends totaling £4.4 billion over the years, it is estimated that the total return from this transaction 16 years ago exceeds six times.
This transaction comes at a time when the Li Ka-shing family is facing controversy over the Panama Canal port concession, seen as a strategy to cash out quality assets and reduce geopolitical risks.
About a year ago, CK Hutchison agreed to sell two ports in the Panama Canal and over 40 other global ports to a consortium consisting of the U.S. investment company BlackRock and Mediterranean Shipping Company. This was seen as a victory for former U.S. President Donald Trump, who pledged to “take back” the canal from Beijing. However, Beijing opposed the $22.8 billion deal, leading to a stalled process. This year, a Panamanian court declared the concession invalid on constitutional grounds.
This week, Panamanian authorities effectively took control of these ports. CK Hutchison is fighting back through international arbitration. However, this dispute has cast a shadow over the group.
The news of the sale on Thursday boosted the shares of CK Group’s publicly listed companies in Hong Kong. By the close of Thursday, CK Hutchison, CK Asset, CK Infrastructure, and Power Assets saw their stock prices rise by 3% to 4.5%. Engie’s share price on the French stock market also surged nearly 8% at one point, reaching €29.73.
CK Hutchison and CK Infrastructure are expected to receive financial gains of £1.37 billion (HK$14.5 billion) each from this transaction, Power Assets is expected to receive £1 billion (HK$10.7 billion), and CK Asset is projected to gain £800 million (HK$8.4 billion) in similar accounting gains.
Chairman of CK Group, Victor Li (son of Li Ka-shing), stated that the family business will continue to seek investment and development opportunities in existing and emerging markets (including the UK and other regions), whether in regulated industries, projects with long-term stable contracts, or other enterprises with enormous potential.
From the buyer’s perspective, UKPN will return to French hands, as the French government partially owns Engie Group.
Engie CEO Catherine MacGregor stated in another statement that this acquisition would be a “decisive step” for the group to enhance its position in the UK and energy transition fields.
She said, “This fully aligns with our vision of becoming a critical participant in regulated electricity network infrastructure.”
During Engie’s annual financial results conference call in London on Thursday, MacGregor emphasized the significance of integrating a “high-quality asset” into their portfolio at the current crucial geopolitical moment. This acquisition will make the UK Engie’s second-largest market after France, surpassing Belgium, the U.S., and Brazil.
“In today’s political and geopolitical turbulence, energy is more crucial than ever. This is about the affordability, security, and sovereignty of energy,” she said.