Hutchison Whampoa is a Fortune 500 company and one of Hong Kong’s largest listed companies. It is 49.97 per cent owned by the Cheung Kong Group, a property company. Hutchison’s origins date back to two companies founded in the 19th century – Hong Kong and Whampoa Dock, established in 1863 by British merchant John Duflon Hutchison, and Hutchison International in 1877. In 1977, Hutchison became Hutchison Whampoa Ltd. Its operations include ports, with operations across Europe, the Americas, Asia, the Middle East and Africa, property and hotels, retailing through AS Watson & Co, PARKnSHOP supermarkets, Fortress electrical appliance stores, telecommunications through Hutchison Telecommunications International Ltd. It is also involved in infrastructure through its infrastructure arm, Cheung Kong Infrastructure, and has an interest in Hongkong Electric Holdings (HEH), the sole electricity supplier to Hong Kong Island and Lamma Island. Hutchison is also a major shareholder of Husky Energy, one of Canada’s largest energy and energy related companies. It is headed by Li Ka-shing, Asia’s wealthiest man, who has been nicknamed “Superman” because of his investment prowess.
Temasek diversifies away from China banks
Bloomberg in Singapore
Temasek's plan to buy a stake in the retail arm of Li Ka-shing's Hutchison Whampoa will help Singapore's state-owned investment firm extend its reach in China and ease its reliance on mainland banks.
It agreed on Friday to buy 24.95 per cent of AS Watson for HK$44 billion.
Watson is Hutchison's biggest unit by sales with health and beauty product stores and ParknShop. Its Watsons health and beauty product chain has stores in more than 20 mainland cities.
"Acquisitions like this one were highly overdue to balance out Temasek's heavy exposure to the financial industry, especially to Chinese banks," said Sven Behrendt, the managing director at Geneva-based GeoEconomica, which researches sovereign wealth funds. "We shouldn't forget that China's banks currently have problems. In that respect, the deal really is positive for the portfolio of Temasek."
Temasek, the biggest foreign investor in the mainland's largest banks, has stakes in Industrial and Commercial Bank of China, China Construction Bank and Bank of China valued at US$16.5 billion. The mainland's top four lenders are poised to report the slowest profit growth since the 2008 financial crisis amid surging bad loans and more competition, according to analyst estimates.
Financial services made up 31 per cent of Temasek's S$215 billion (HK$1.31 trillion) holdings as of March last year.
The mainland's health and beauty retail market was worth about 915 billion yuan (HK$1.14 trillion) last year, according to data from Euromonitor.
"They are killing two birds with one stone by both investing in China and by investing in a consumer-related company," Behrendt said. "In that respect, the deal definitely fits their strategy."