Australian regulator approves takeover of Duet Group by Cheung Kong Infrastructure
24 April 2017
The Australian regulator yesterday approved the takeover of gas pipeline operator and power distributor Duet Group by a consortium led by Hong Kong billionaire Li Ka-shing's Cheung Kong Infrastructure Holdings Ltd (CKI).
The approval comes six months after the Australian government rejected a A$10-billion bid by CKI for a controlling stake of state-owned energy grid Ausgrid, citing security concerns. (See: Australian government blocks Chinese investment in electricity network)
Chinese state-owned State Grid Corporation and Hong Kong-based CKI had been in the race for a 99-year lease for the 50.4-per cent stake in Sydney electricity grid Ausgrid, in a deal where the Australian government would have netted around $10 billion.
Some analysts opine that if Ausgrid came to be under Chinese control, it could be vulnerable to cyberattacks from hackers from Russia, who in December hacked the Ukraine electricity grid.
The CKI-led consortium, which also includes Cheung Kong Property Holdings and Power Asset Holdings, had in December 2016 tabled a A$7.3-billion ($5.4 billion) cash bid for Duet Group.
In January, the Australian government formed a new body called Critical Infrastructure Centre to access whether any investment by overseas companies in critical infrastructure assets could raise national security concerns.
Duet chairman Doug Halley said that CKI has informed that the Australian Foreign Investment Review Board (FIRB) had approved the deal and shareholders would now be able to vote on the deal on Friday.
The Duet deal would be Li's biggest acquisition in Australia, according to data compiled by Bloomberg.
Duet's assets include the Dampier Bunbury natural-gas pipeline, which connects gas reserves on Western Australia State's offshore North West Shelf and gas and electricity distribution networks in the southeast around Melbourne.
CKI owns stakes in Australian assets including SA Power Networks, Powercor Australia and Australian Gas Networks.
The Duet deal would be Li's biggest acquisition in the nation, according to data compiled by Bloomberg.
CKI has diversified investments in energy, transportation, water infrastructure, waste management, waste-to-energy and infrastructure related businesses.
Its investments and operations span Hong Kong, mainland China, the UK, the Netherlands, Portugal, Australia, New Zealand and Canada.