CK Scraps Australia deal in first big setback for Victor Li

HONG KONG: CK Group has formally walked away from its A$13bil (US$9.5bil) bid to buy Australia’s biggest gas-pipeline operator, representing the first major setback for chairman Victor Li since taking over the family empire from his father in May.

Li dropped his pursuit of APA Group on Tuesday, confirming the end of what became a doomed deal on Nov 7, when Australia effectively said it would block the transaction on national-security grounds.

Had the purchase gone through, Li, 54, would have gained control over pipelines delivering about half of Australia’s gas, kicking off his reign by making the biggest overseas purchase the Hong Kong group had ever done – even under his deal-savvy father.

But the plan collapsed, underscoring how the world has changed since the days CK was gobbling up assets worldwide under the chairman’s father, Li Ka-shing, Hong Kong’s richest man.

Go-to investment destinations such as Australia are no longer as welcoming as they once were, and many of the CK group’s main businesses are aging, with some facing the prospect of falling behind nimbler technology upstarts.

That all adds up to pressure on the new chairman. While Victor Li has said multiple times that he doesn’t plan to make drastic changes at CK, he may need to reconsider whether to maintain status-quo stability or chart a new path for growth in the decades to come.

CK gave up the deal hours after Treasurer Josh Frydenberg confirmed on Nov 20 that the deal would be “contrary to the national interest,” and may create too much foreign ownership by a single company in the gas transmission business. CK bought Australian power distributor Duet Group last year.

Li has been blocked in Australia before. — Bloomberg