Li Ka-shing Buys Smart-Meter Firm Ista in $5.3 Billion Deal

Hong Kong billionaire Li Ka-shing agreed to acquire CVC Capital’s German smart-meter business Ista International GmbH for about 4.5 billion euros ($5.3 billion), including debt.

Li will make the investment through Cheung Kong Property Holdings Ltd. and CK Infrastructure Holdings Ltd., which will control 65 percent and 35 percent of the company respectively, the companies said in a statement Thursday. The deal must still be approved by antitrust officials.

CVC took a majority stake in Ista in 2013 in a deal that valued the company at 3.1 billion euros, people familiar with the matter have said. Smart-meter assets have become attractive to bidders in recent years ahead of a European Union goal to replace at least 80 percent of electricity meters with smart meters by 2020 in a drive to reduce emissions.

The deal contributes to Cheung Kong Property’s push to diversify revenue beyond the property sector, said Marvin Lo, a Hong Kong-based analyst with Mizuho Securities Asia. The valuation of the deal is fair, as it is in line with similar smart-meter transactions, Lo said.

RBC Capital Markets was sole financial adviser to Cheung Kong Property and CK Infrastructure. The deal has a break up-fee of 200 million euros if the buyer or seller backs out.

Shares of Cheung Kong Property were unchanged at HK$62.80 at the close Friday in Hong Kong, while the city’s benchmark Hang Seng Index dropped 0.6 percent. CK Infrastructure gained 2.3 percent to HK$72.85.

Ista specializes in heat and water meters for apartment buildings and commercial properties and uses technology to help customers monitor and reduce energy use and maintain smoke alarms remotely. The company had sales of 850.4 million euros from about 12 million customers last year, according to its website.

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