By Elias Schisgall and Megan Cheah
France's Engie will acquire UK Power Networks for 10.5 billion pounds in equity value, equivalent to about $14.2 billion, from Hong Kong billionaire Li Ka-shing's CK Group.
The deal values UK Power Networks at about 15.8 billion pounds on an enterprise basis, roughly 10 times its estimated 2027 adjusted earnings before interest, taxes, depreciation and amortization, Engie said Wednesday.
The deal would make the U.K. Engie's second-largest market.
Hong Kong's CK Group subsidiaries disclosed the transaction in separate filings. Power Assets, which owns 40% of UK Power Networks, said it expects a gain of 10.7 billion Hong Kong dollars, equivalent to US$1.37 billion, from the sale. Property developer CK Asset, which is selling its 20% stake, expects a gain of HK$8.4 billion, it said.
CK Infrastructure said it expects a gain of HK$14.5 billion from the sale of its 40% stake, including the impact of its 36% interest in Power Assets.
Its parent, CK Hutchison, is expected to record a similar gain.
Shares of the four Hong Kong-listed companies' rose Thursday after the announcement. Power Assets rose 4.2%, CK Asset added 1.9%, CK Infrastructure gained 5.2%, while CK Hutchison was 3.1% higher.
Engie will finance the purchase with about 5 billion euros, equivalent to $5.9 billion, of debt and hybrid securities, along with an asset-disposal program of about 4 billion euros by 2028. It also plans to raise up to 3 billion euros through an accelerated book-building to support its investment-grade rating.
Engie said the acquisition would expand its footprint in the U.K., expecting the deal to have an immediate positive impact on results and to be accretive in the first full year after closing.
"This transaction will both enhance the Group's growth trajectory and reduce our risk profile, providing more visibility on future earnings," Catherine MacGregor, Engie's chief executive, said.
The sale is subject to shareholder approval at the three companies and at parent CK Hutchison, as well as regulatory approval.
The deal is expected to close later this year.
Write to Elias Schisgall at elias.schisgall@wsj.com and Megan Cheah at megan.cheah@wsj.com
(END) Dow Jones Newswires
02-25-26 2304ET
