Li Ka-shing's 136.7 billion business, want to be yellow?

As the richest man in Hong Kong, every time Li Ka-shing makes a move, he will attract strong attention from the outside world.

After investing in the UK for decades, perhaps what Li Ka-shing didn't expect was that this time he was "stabbed in the back" from the UK.

On February 7, according to the Global Times, the chief executive of British telecommunications giant Vodafone De La Valle confirmed that the company's merger with Three UK, a telecommunications company under the Changhe Group led by Li Ka-shing, is cooperating with the British government's national security review.

According to the previous merger plan, the transaction between Vodafone and Chang is worth about 19 billion US dollars (about 136.7 billion US dollars), and after the merger is completed, the company will become the largest mobile communications operator in the United Kingdom, with more than 27 million customers.

It is reported that after the completion of the merger, Vodafone will own 51% of the shares of the merged company, and Changhe will own the remaining 49% of the shares.

Both Vodafone and Three UK have denied the British government's allegations.

In fact, as early as the middle of last year, Changhe issued an announcement that Three UK had officially implemented the merger with Vodafone.

According to plans at the time, the combined company expected to invest £11 billion over the next decade to build Europe's most advanced 5G network.

The deal is subject to regulatory and shareholder approvals and is expected to close by the end of 2024.

This time, following the scrutiny, De Laval added that both Vodafone and CJC are subject to strict regulations under UK data protection law and telecommunications security regulations, and that the review is going "as planned", "I think it proves that we are both complying with strict rules that apply in different situations." ”

Some relevant media pointed out that in this transaction, the British government has the right to block this transaction.

In other words, Li Ka-shing's $19 billion business may change.

According to the data, Li Ka-shing's investment projects in the UK cover ports and terminals, power and energy, natural gas, medical and other industries. Previously, the outside world had lamented that Li Ka-shing was going to "buy the whole of Britain".

Bet like crazy

Li Ka-shing's sense of smell in business has always been very sensitive.

In his more than 60 years in business, Li Ka-shing has made almost no mistakes in major investments. The "snake swallowing the elephant" merger and acquisition of Hutchison Whampoa and the "selling oranges" are classic cases of business.

In 2010, the Li Ka-shing family began to make a big move, and the UK became its primary target.

After determining the strategic goals, Li Ka-shing's business operations can also be described as opening and closing.

Key strategic acquisitions include:

In 2010, Li Ka-shing's Cheung Kong Infrastructure paid £5.8 billion to buy EDF's UK grid business, and it wanted to spend between £1.5 billion and £2 billion to buy the UK's high-speed rail. However, the business was eventually "cut off" by the Canada Pension Fund Corporation for 2.1 billion pounds.

In 2011, Li Ka-shing's Cheung Kong Infrastructure, together with UK Water, which is jointly owned by Cheung Kong and the Li Ka-shing Foundation, acquired Northumbrian, one of the UK's largest water companies, at a cost of £2,411.6 million.

In 2012, Li Ka-shing spent another $3.032 billion to bown the British piped gas business.

The annual investment of tens of billions of Hong Kong dollars did not satisfy the Li Ka-shing family. Since then, it has accelerated its investment in the UK.

In 2015, Cheung Kong Infrastructure (KI) acquired Eversholt Rai, a British rail car leasing company, into Lee's Commercial Territory for HK$2.5 billion. Not only that, but it also bought British passenger train company Eversholt Rail Group for £3.5 billion.

In March 2015, Li Ka-shing's Hutchison Whampoa acquired the British telecommunications company O2 for 10.25 billion pounds, and sat on the "number one spot" of the British telecom operator.

In 2016, it planned to spend £11 billion to acquire a 51% stake in the gas pipeline business of the British National Grid.

In June 2018, Cheung Kong Asset Group spent £1 billion to acquire 5 Broadgate, a landmark office building in the City of London.

Statistics show that by the end of 2018, the total assets of Li Ka-shing's companies in Europe had reached HK $673.69 billion, accounting for 54.67% of the total assets.

According to Li Ka-shing's investment in the UK, Li Ka-shing has spent huge sums of money on acquisitions in the UK over the past two decades, making it one of the UK's largest overseas investors.

Continue to "move"

Statistics show that with Li Ka-shing's large-scale purchases, as of 2018, the Li Ka-shing family controls almost 30% of the UK's electricity, more than 7% of the British population's drinking water, and 1/4 of the natural gas supply.

In addition, Li Ka-shing is also the majority shareholder of the UK's largest telecom operator, and not only that, but it is also the controlling shareholder of the UK's largest liquor chain.

Of course, its investment in the UK has not been without its challenges.

In the early days of his investment in the UK, because most of the Li Ka-shing family's investments were in infrastructure, they were also subject to antitrust investigations by the local government.

After entering 2020, due to the complicated international situation, Li Ka-shing's investment direction began to change.

In 2021, LONG announced the sale of its telecom infrastructure business in the European market for 10 billion euros, including 25,000 telecom tower assets and business interests in six countries including the United Kingdom, Denmark and Ireland, with the buyer being Cellnex Telecom, the largest wireless base station operator in Europe and the Spanish wireless communication infrastructure operator.

To facilitate the completion of the transaction, the sale was subsequently divided into six separate transactions, one for each country. Launch tower assets in Austria, Denmark and Ireland were sold in 2020, and deals in Italy and Sweden were completed in 2021, with the exception of the UK, which has been slow to be approved.

It was not until March 2022 that the UK's Competition and Markets Authority finally gave conditional approval to the deal.

Of course, its sale plans did not stop.

In March 2022, Cheung Kong sold its London headquarters for £729 million.

In the same year, the Li Ka-shing family also proposed to sell UK Power Networks, a British electricity distribution company, for £15 billion, but the Li Ka-shing family eventually abandoned the deal because the family thought the price was too low.

It is reported that even if it is sold according to 15 billion pounds, the benefit of the Li Ka-shing family will be more than 2 times.

Regarding investment in the UK, Li Ka-shing once said that the reason for investing heavily in the UK is not because of his preference for the UK, but because of the return and stability of the projects he invests in.

The merger of the Li Ka-shing family and Vodafone is not without warning. As early as late January, the Competition and Markets Authority, the UK's antitrust agency, announced that it would launch a 40-day phase one investigation into the merger, focusing on the impact of the deal on competition in the UK's mobile communications market and determining whether it could lead to a "significant reduction in competition".

If necessary, the CMA will also conduct a second phase of review, which can be extended to 24 weeks.

Kanjian Finance believes that the review of the British government has increased the variables of this deal, but it is not impossible to pass.

For Li Ka-shing, his biggest task at the moment is not to "conquer the city", but to defend and inherit. As he said in his speech at Tsz Shan Monastery in Hong Kong last year:

"Everything has a way, like a dream bubble".