Mergers & Acquisitions

Li Ka-shing may be retiring, but his companies carry on making deals

PUBLISHED : Monday, 26 March, 2018, 8:16am
UPDATED : Monday, 26 March, 2018, 8:56am

Hong Kong richest man Li Ka-shing may have announced his retirement, but his companies are still making deals in the first quarter, according to data from Thomson Reuters.

There are two deals involving Li affiliated companies worth US$58.9 million, according to Thomson Reuters’ tracking on Hong Kong mergers and acquisitions in the first quarter to March 23.

Last year Li’s companies conducted 16 deals worth US$18.4 billion.

Li, nicknamed “Superman” in the city for his investing prowess, announced he would be stepping down as chairman of his two flagship companies – CK Hutchison Holdings and CK Asset Holdings after the annual general meeting on May 8, handing over the reins to his elder son, Victor Li Tzar-kuoi.

Li’s companies have conducted 421 mergers and acquisitions worth US$286.99 billion from 2000 through the first quarter of 2018, according to Thomson Reuters.

This includes the November sale of The Center for HK$40.2 billion (US$5.12 billion) which could be the world’s priciest real estate transaction.

The Thomson Reuters data also showed total mergers and acquisitions in Hong Kong dropped 36 per on year in the first quarter to March 23, totalling US$21.7 billion, down from US$33.9 billion a year earlier. This is the weakest start to a year for Hong Kong deal making activity, in terms of value, since the first quarter of 2013 at US$13.3 billion.

The drop was due to the smaller deal size. The average mergers and acquisitions deal size deals fell to US$79.8 million in the first quarter this year, compared to US$95.9 million in the first quarter of 2017.

Hong Kong companies have witnessed three deals above US$1 billion so far this year, but none higher than US$3 billion. In comparison, there were six deals above US$1 billion and one deal above US$3 billion in the same period a year earlier.

The largest deal saw Taiwanese sportswear maker Pou Chen Corp acquire the entire share capital in mainland sportswear retailer Pou Sheng International (Holdings) from Yue Yuen Industrial (Holdings) for US$1.6 billion. Upon completion, Pou Sheng International (Holdings) will be delisted from the stock exchange.

The financial sector accounted for 25.6 per cent of all deals in Hong Kong with a combined total of US$5.5 billion, while real estate followed in second place with US$3.7 billion.