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July 30, 2010 10:43 AM

DLA Piper, Herbert Smith Lead on $9 Billion Utilities Deal

Posted by Zach Lowe

The deal of the day is the move by Li Ka-Shing, the richest man in Hong Kong, to purchase a British unit of the French power giant EDF for a shade over $9.1 billion. Herbert Smith and DLA Piper scored lead roles in the deal, through which companies controlled by Li will take control of a power grid that supplies London, the London Underground, and Heathrow and Gatwick airports, according to the U.K. publication Legal Week

DLA Piper advised Cheung Kong Infrastructure (CKI), the lead partner in a consortium of Li-controlled companies that will take over the power grid as part of Li's continued push to expand beyond Hong Kong, according to Legal Week and The Wall Street Journal.

Herbert Smith is advising EDF, a longtime firm client, and the firm's work isn't done yet. The French company, the world's largest operator of nuclear power plants, is still considering the CKI offer, the WSJ says. A deal is likely, though, since EDF agreed not to pursue talks with any other bidder for one year, according to The New York Times and a statement from CKI. The Hong Kong consortium outbid the U.K. utility Scottish & Southern Energy and a consortium of other bidders headed by an Abu Dhabi sovereign wealth fund and Canada Pension Plan, the WSJ says.

The Times notes that CKI is part of Cheung Kong Holdings, which grew out of a plastic-flower manufacturing business that Li launched in the 1950s and is now among Hong Kong’s largest companies.

EDF has been on an acquisition spree since 2008, and proceeds from a sale of the power grid would help pay down debt the company piled up in those deals, the NYT says. 

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