Cheung Kong to buy Canadian building equipment services provider for HK$16.4 billion
Cheung Kong Property Holdings, controlled by Hong Kong’s second richest man Li Ka-shing, announced plans to acquire a Canadian building equipment services provider for HK$16.44 billion (US$2.12 billion).
The Canadian company is engaged in the building equipment services sector providing water heaters, HVAC (heating, ventilation and air conditioning) equipment, comfort protection plans and other services to homeowners primarily in Ontario, Canada, under the consumer brand identity of “Reliance Home Comfort”, according to the firm’s filing to the Hong Kong stock exchange on Friday.
The overseas investment comes after Carrie Lam Cheng Yuet-ngor was elected as Hong Kong’s fourth, and first female, chief executive on Sunday
Reliance Home Comfort also has operations in Manitoba, Saskatchewan and Alberta, Canada.
CK Property intends to sell up to 25 per cent of the Canadian firm to Cheung Kong Infrastructure, subject to obtaining the necessary approvals.
It said no agreement has been reached with CKI.
“The group has given serious and prudent consideration to and participated in certain quality global
investments that meet the investment criteria set out in the company’s latest annual reports, with a
view to extending its reach to new business areas to enhance its recurring revenue streams and
mitigate the cyclical nature of cash flows associated with property development,” it said.
The acquisition represents a quality investment for the group with stable financial performance and appropriate growth opportunities, it said.
“Its stable revenue and cash flows will help mitigate the cyclical nature of the property market, and are expected to enable the company to sustain a steady level of dividend for the shareholders’ benefit,” CK Property said.
The acquisition in Canada is also consistent with the company’s global diversification strategy, it said.
In February last year, CK Property agreed to pay HK$7.6 billion to buy an aircraft leasing unit from CK Hutchison, another firm owned by Li, as the property giant looks to expand into new business areas.