Date
18 December 2017
Bankers are salivating at the prospect of fees from Li Ka-shing's ongoing company-buying spree. Photo: Bloomberg
Bankers are salivating at the prospect of fees from Li Ka-shing's ongoing company-buying spree. Photo: Bloomberg

Li acquisition spree good news for Asian banks

Li Ka-shing has single-handedly propelled Asian mergers and acquisitions (M&A), loan and equity deals so far this month to a record.

His company-shopping spree is particularly good news for the investment bankers close to the tycoon. 

This month, Li overhauled his vast business empire, resulting in US$47.7 billion worth of M&A, and went on to make three overseas buyout bids, including last week’s US$15.4 billion for Telefonica’s British O2 mobile-network unit.

To finance these deals, Li is borrowing about US$16 billion from banks and issuing US$600 million in equity, taking the total volume of his deals to US$83.4 billion, Reuters calculated.

That’s the bulk of the US$108 billion of Asian M&A business so far, the best-ever start to a year.

It raises hopes the Year of the Goat could bring a windfall to a region that has been starved of fees, Reuters said.

Over the years, Goldman Sachs has emerged as Li’s favored bank, pulling in an estimated US$220 million in fees from Li’s two main companies, Hutchison Whampoa Ltd. (00013.HK) and Cheung Kong (Holdings) Ltd. (00001.HK) since 2000.

That tops the US$136 million earned from Li by HSBC Holdings PLC (00005.HK), traditionally Li’s go-to bank for financing deals.

As Asia’s richest man steps up the pace of his overseas M&A, bankers see even more deals.

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RA/FL

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