Hong Kong's Cheung Kong Infrastructure Set to Acquire Germany's Ista in $5.3 Billion Deal -- Update

By Ben Dummett Features Dow Jones Newswires

Cheung Kong Infrastructure Holdings Ltd. is set to acquire Germany's Ista International GmbH for about EUR4.5 billion ($5.3 billion), including debt, according to a person familiar with the matter, betting on the increasing adoption of so-called smart metering technology to cut water and power consumption.

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The deal is expected to be announced later Thursday.

Controlled by Hong Kong billionaire Li Ka-shing, CK Infrastructure is acquiring the smart-metering company from private-equity firm CVC Capital Partners, and its minority partner Canada Pension Plan Investment Board, Canada's biggest pension fund.

Based in Essen, Germany, Ista's metering equipment is used by property managers and homeowners to measure individual tenant and home consumption of energy and water to reduce waste and cut costs. By billing energy and water use based on individual consumption, consumers have more incentive to use less.

CKI is a well-known global infrastructure investor, recently winning government approval to acquire Australian pipeline operator and power distributor Duet Group for $5.8 billion.

Its infrastructure investments including in energy, transportation, water, and waste management span parts of Asia, Australia, Canada and Europe. The Ista deal would be CK Infrastructure's first in Germany, according to a list of holdings on the company's website.

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The deal also represents a potentially positive sign that China-based companies continue to pursue foreign acquisitions. It comes as European sellers show signs of skittishness at deal-making with Chinese buyers following China's clampdown on capital outflows and some lending activity.

The Ista acquisition comes at a time when governments are pushing measures to curb energy use as a way to reduce reliance on fossil fuel imports, cut greenhouse gases to help counteract climate change and foster development of new technologies to boost economic growth.

Last year, the European Commission proposed to update its so-called energy efficiency directive, which would require member countries to cut energy use by 30% by 2030. To help achieve that goal, the EC recommended that consumers get access to individual metering to give them more control over their energy consumption.

Last year, Ista generated revenue of EUR850.4 million ($991 million), up 4.9% from the previous year, according to its website. Profit figures weren't available. The company has more than 5,000 employees.

CVC, based in London, acquired a majority stake in Ista in 2013 from Charterhouse Capital Partners, another U.K.-based buyout firm, in a deal that valued the company then at about EUR3 billion including debt.

Write to Ben Dummett at ben.dummett@wsj.com

(END) Dow Jones Newswires

July 27, 2017 05:45 ET (09:45 GMT)