This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Exxon Mobil Sells Hong Kong Assets

NEW YORK (TheStreet) Exxon Mobil (XOM - Get Report) has agreed to sell controlling stakes in two Hong Kong electricity businesses for HK$26 billion ($3.35 billion), striking a deal for the unwanted operations after more than nine months of talks.

CLP Holdings, Hong Kong's largest electricity producer, said Tuesday, Nov. 19, that it had teamed with China Southern Power Grid International to buy Exxon Mobil's 60% stake in Castle Peak Power and had struck a separate deal to buy Exxon Mobil's 51% holding in Hong Kong Pumped Storage Development.

CLP will pay HK$12 billion for 30% of Castle Peak and HK$2 billion for the majority holding in Pumped Storage, increasing its stakes in the companies to 70% and 100%, respectively. China Southern Power did not say how much it had paid for its 30% stake in Castle Peak, though CLP executive Betty Yeun told reporters that the deal was done on the same terms as her company's acquisition.

"The transactions give CLP majority control over our generation assets and enable us to better coordinate our generation business with the transmission and distribution operations," CLP CEO Richard Lancaster said in a statement.

Must Read: The Deal: Cepsa Woos Coastal With $2.2B Offer

CLP, formerly China Light and Power, is listed on the Hong Kong exchange and is controlled by the Kadoorie family. It first announced that it was in talks to buy Castle Peak in mid-March.

The deals value the two companies' combined operations at about 13.3 times their 2012 earnings and equates to an enterprise value of about 7.9 times Ebitda for 2012, CLP said in a presentation on Tuesday.

Striking the deal in partnership China Southern Power cements a strategic partnership that could help CLP to expand operations on the Chinese mainland, the Hong Kong-based company added.

CLP will finance the acquisition with its own cash and new bank facilities including an HK$10 billion loan from HSBC.

Exxon Mobil spokespeople could not immediately be reached for comment.

CLP shares closed Tuesday at HK$62.25, up HK$0.55, or just under 1%, on their Monday close.

Written by Paul Whitfield in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
XOM $80.02 0.10%
AAPL $123.22 -1.00%
FB $94.04 -3.00%
GOOG $625.77 0.35%
TSLA $254.50 -4.10%

Markets

Chart of I:DJI
DOW 17,475.50 +34.91 0.20%
S&P 500 2,067.64 -12.01 -0.58%
NASDAQ 5,039.7760 -48.8540 -0.96%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs