Herbert Smith, DLA lead on £5.8bn EDF sale to Hong Kong billionaire

Herbert Smith and DLA Piper have scored lead roles on EDF's £5.8bn sale of its UK electricity networks business to Cheung Kong Infrastructure (CKI), a company led by Hong Kong billionaire Li Ka-shing.

DLA Piper advised CKI, which outbid a consortium of Macquarie of Australia, the Abu Dhabi Investment Authority, and Canada Pension Plan. The firm fielded a team led by London-based corporate partners Jon Hayes and Kiran Sharma.

CKI holds a 39% stake in Hongkong Electric, the electricity supplier, and the two companies will work together to run EDF Networks, as they have done for other energy assets in the UK, including Northern Gas Networks, a gas distribution business that was acquired in 2004.

The sale covers assets of low-voltage electricity distribution networks in the east and south of England, and long-term contracts with businesses such as the London Underground and Heathrow and Gatwick airports. EDF currently supplies power to eight million homes in England and provides about a fifth of the UK's energy supply.

The French-based electricity group EDF was represented by long-term adviser Herbert Smith, which fielded a team led by energy partner Henry Davey.

Herbert Smith also took the lead for EDF when it took over British Energy in 2008 in a £12.5bn deal that also generated roles for a raft of major firms including legacy Lovells, White & Case and Sullivan & Cromwell. Clifford Chance (CC) acted for British Energy.

The deal follows a series of investments by the Hong Kong-based Li, one of Asia's richest individuals, in gas, water and road assets in Australia, Canada and the UK to counter price curbs in Hong Kong's power market.

The deal comes amid a recent flurry of large corporate bids with Linklaters and CC this month being instructed to act on a £5bn reverse takeover of International Power by GDF Suez of France.

For more, see Links and CC win roles on £5bn GDF deal as M&A activity bursts into life