The Hong Kong arm of the mainland-backed China International Trust and Investment Corporation, CITIC Pacific, is to buy a 20 per cent stake in China Light & Power (CLP).
The move, announced last night, gives Beijing a direct say in the running of the territory's largest electricity company.
However, analysts were at a loss to explain the $16.25 billion acquisition, saying while it seemed good news for CLP there was little benefit for CITIC other than to gain influence over a strategic Hong Kong industry.
CLP is the sole provider of power for Kowloon, the New Territories and Lantau.
Analysts pointed to the similarity with CITIC's purchase of a major stake in Cathay Pacific last year, which saw the company raise its holding to 25 per cent.
An apparent U-turn in its former policy towards Cathay, the move was seen as being politically motivated.
