Cheung Kong Infrastructure Holdings Ltd (CKI, 長江基建集團), part of Li Ka-shing's (李嘉誠) vast portfolio, has made a bid for Canadian power firm TransAlta in its latest move to expand overseas.
Under the deal, Hong Kong-based Cheung Kong signed an agreement to acquire the Canadian firm for HK$4.95 billion (US$638 million), it said in a statement issued late on Monday.
The move follows the firm's recent purchase of two power plants in southern China, alongside assets it owns in Australia, Britain and the Philippines.
"The proposed acquisition will provide immediate cashflow stream and profit contribution," said Kam Hing-lam (甘慶林), group managing director of CKI. "As a long-term investor, we expect TransAlta Power to generate steady returns for the group over the years."
The offer is subject to acceptance by at least two-thirds of Calgary-based TransAlta Power's unit-holders and regulatory approvals and is expected to be completed early next year, CKI said.
Kam said CKI, which owns a large chunk of domestic supplier Hong Kong Electric, will pursue other acquisition opportunities using the HK$9 billion it has on hand.
He added the expansion was a result of the current affordability of mega-infrastructure projects around the world.
TransAlta Power owns a 49.99 percent stake in TransAlta Cogeneration, which has stakes in six Canadian power generating plants, including five natural gas-powered power units.
"CKI has always been very interested in expanding our presence into North America," Kam said.
"The proposed acquisition of TransAlta Power is a springboard for CKI into the Canadian energy market ... and we look forward to further expanding into North America," Kam said.
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