Mainland firms snap up HK assets

Hong Kong has seen an expansion of investment and acquisitions in sectors such as retail, property and banking, reports Oswald Chan.

While some Hong Kong-based blue-chip companies are selling their local business assets, a spate of mainland enterprises are expanding into the city's retail, property and banking sectors in search of business diversification.

Mainland-based retail and beer conglomerate China Resources Enterprise Ltd confirmed it has submitted a bid for ParknShop, tycoon Li Ka-shing's Hong Kong supermarket chain, at a "reasonable price". CRE said it may partner with United Kingdom-based Tesco PLC on the purchase.[provided to china daily]

Mainland-based retail and beer conglomerate China Resources Enterprise Ltd confirmed at a July 21 news conference that it has submitted a bid for tycoon Li Ka-shing's Hong Kong supermarket chain at a "reasonable price". CRE Chief Financial Officer Frank Lai added that CRE may partner with United Kingdom-based grocery chain Tesco PLC to bid for Hutchison Whampoa's ParknShop supermarket chain.

CRE said that it may raise debt and does not rule out selling "non-core" assets to fund the ParknShop purchase. The sale of the local supermarket grocery chain will fetch an estimated $3 billion to $4 billion.

In the property sector, mainland property developers have become more aggressive when bidding for land parcels in Hong Kong since 2012. China Overseas Land and Investment Ltd successfully grabbed two land parcels in the Kai Tak region, whereas the Hong Kong government specified that property developers can sell the residential flats built on those two parcels only to Hong Kong permanent residents.

Mainland flagship property developer China Vanke Co, in cooperation with Hong Kong blue-chip developer New World Development, also successfully bid for a land parcel in Tsuen Wan early this year. Vanke said that its interests in the Tsuen Wan parcel will be injected into its locally listed subsidiary, Vanke Property Overseas.