Asian business tycoon snaps up Northumbrian Water
Northumbrian Water has been bought by a syndicate led by Cheung Kong Infrastructure Holdings Limited (CKI), under the newly formed company UK Water for £2.4bn.
The sale of Northumbrian Water to Hong Kong businessman and owner of CKI, Li Ka-Shing, was agreed after the board of utility recommended the offer.
As part of the agreement, and to comply with the UK's merger rules, CKI has sold Cambridge Water to HSBC Bank for an enterprise value of £74.8m.
Group managing director of CKI, H L Kam, said: "We attach great importance to the skills and experience of the existing management and employees of Northumbrian and believe they will be an important factor in the continuing success of the Northumbrian group."
In addition, the Ontario Teachers' Pension Plan, which holds a 26.8% stake, also declared that it would not be making a counter-offer. It also agreed to vote in favour of the takeover.
Under the deal, Northumbrian Water's existing management team will stay on and work within the UK Water group, which will take over the running of water services in the south and north-east through its subsidiary Essex & Suffolk Water.
As a result of its sale, Northumbrian Water, which listed on the stock exchange in 2003, has been valued at approximately £4.8bn, making it the largest takeover this year.
Shareholders of Northumbrian Water will receive 465p share from CKI.
The acquisition marks CKI's third UK investment in the past 18 months - following its takeover of Seabank Power and UK Power Networks last year and is expected to strengthen its global portfolio of investments in the gas, water and electricity sector.