Su­per­man in firm tilt to West

China Daily (Canada) - - HONG KONG - By OSWALD CHAN in Hong Kong oswald@chi­nadai­lyhk.com

Apart from a sweep­ing cor­po­rate re­vamp of his em­pire in early 2015, ty­coon Li Ka-shing ex­panded his busi­ness em­pire through of­fload­ing as­sets in Hong Kong and the main­land since 2011 and uti­liz­ing the “am­mu­ni­tion” — or pro­ceeds from those sales —to ac­quire busi­ness as­sets in Europe re­garded as un­der­val­ued af­ter the Euro­pean sov­er­eign debt crises of 2011.

True to his Hong Kong moniker of “Su­per­man”, in def­er­ence to his in­vest­ment acu­men, Li’s sales of th­ese Hong Kong and main­land busi­ness as­sets in­di­cate their val­u­a­tion had reached the high­est level. (see ta­ble below).

An­a­lysts say Li’s as­set sales aim to guard against any credit crunch risk on the main­land. “Af­ter years of un­prece­dented mon­e­tary ex­pan­sion, the cen­tral govern­ment has been des­per­ately try­ing to rein in credit growth. His­tor­i­cally, ex­ces­sive credit growth has nearly al­ways been fol­lowed by se­vere fi­nan­cial crises,” said Si­mon Black, founder of Sov­er­eign Man, an in­de­pen­dent web­site on in­ter­na­tional eco­nom­ics.

“The spillover ef­fect of a credit crunch on the main­land could be­come pan­demic. This is not im­por­tant just for prop­erty ty­coons like Li. There are im­pli­ca­tions for the en­tire world,” Black warned.

Mean­while, Li has been ag­gres­sively pur­chas­ing as­sets in Europe the last few years, a sign of his con­fi­dence that th­ese un­der­val­ued as­sets would bring eco­nomic ben­e­fits for his com­pa­nies when the Euro­pean econ­omy grad­u­ally re­cov­ers. Ac­cord­ing to Forbes, Li’s firms spent $28 bil­lion to buy Euro­pean as­sets be­tween 2010 and 2014.

His re­cent big ac­qui­si­tion in Europe was a $15 bil­lion deal to buy Span­ish mo­bile op­er­a­tor Tele­fon­ica’s UK mo­bile unit O2, which can help the con­sol­i­da­tion of O2 and the ex­ist­ing Three Mo­bile net­work in the Bri­tish tele­com mar­ket.

Hutchi­son Wham­poa had al­ready brought Tele­fon­ica’s Ir­ish busi­ness in 2013. That move saw Li’s com­pa­nies op­er­ate tele­com busi­nesses in Italy, UK, Swe­den, Den­mark, Aus­tria and Ire­land. An­a­lysts ex­pect Li will con­sol­i­date the Ital­ian tele­com op­er­a­tions next.

Li has been snap­ping up Euro­pean in­fra­struc­ture as­sets as well, in­clud­ing UK’s Northumbrian Wa­ter, bought in 2011 for 2.4 bil­lion pounds ($3.5 bil­lion). He also brought the UK elec­tric­ity dis­tri­bu­tion busi­ness of French power group EDF for 5.8 bil­lion pounds. Retail as­sets are also on Li’s radar. Now a part of Li’s AS Wat­son retail em­pire, cos­met­ics re­tailer Su­per­drug was snapped up from Dutch re­tailer Kruid­vat Be­heer in 2002.

The UK is one of Li’s fa­vorite des­ti­na­tions to make busi­ness ac­qui­si­tions. Ac­cord­ing to Dealogic, an in­ter­na­tional in­for­ma­tion provider on in­vest­ment deals, Li has spent around $50 bil­lion to snap up UK busi­ness as­sets since 1995.

Li has also been scout­ing for tech­nol­ogy startup in­vest­ments in Is­rael. Ac­cord­ing to start-up mar­ket track­ers IVC Re­search Cen­ter ,Li’s ven­ture cap­i­tal arm Hori­zons Ven­tures has in­vested in at least 28 Is­raelite start-ups since 2011, and is the big­gest source of for­eign cash for a grow­ing num­ber of star­tups in Is­rael.

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