Li Ka-shing's family has made another move, with hundreds of billions of capital being reallocated, and a major reshuffle in the energy sector has begun.
The Li Ka-shing family is carrying out a major "asset restructuring" in the energy sector.
In February this year, the CK Hutchison Group sold UK Power Networks, the UK power distribution network it had held for 16 years, to French company Engie for more than HK$110 billion, setting a record for energy and power M&A transactions in Hong Kong's capital market in the past 40 years. The return on investment will exceed 500% after the transaction is completed.
In August, it launched the sale of Australian distributed energy enterprise EDL Energy to gradually recover capital.
At the same time, the Li Ka-shing family continues to increase its investment in traditional oil and gas assets in Canada. Cenovus Energy, in which it holds about 30% of the shares, recently announced the acquisition of Athabasca Oil for about CAD 5.7 billion, which is another move after the acquisition of MEG Energy last November.
After the transaction is completed, the CK Hutchison Group's daily oil production will be close to 1 million barrels.
Since buying the dip in Husky Energy in 1986, the Li family has formed a complete closed loop in the upstream oil and gas sector in Canada.
Between this sale and this purchase, Li Ka-shing has obviously completed asset rotation.
The current trend of global energy policies is "security first", and the strategic value of traditional oil and gas assets has been re-evaluated. Although oil sands are capital-intensive, they have long reserve life and large space for cost reduction through technology iteration, making them attractive underlying assets. Overseas utility businesses, by contrast, are increasingly constrained by geopolitical review, leading to rising holding risks.
Selling pressured assets on one hand and increasing positions in long-life resources on the other, what the Li Ka-shing family is doing is probably to restructure the risk exposure of its energy territory.
Selling the UK Power Grid: Political Risks Have Changed
First, take a look at UK Power Networks, which has been held by the CK Hutchison Group for 16 years. It is responsible for the power distribution network in London, the southeast and eastern regions, and is one of the largest power distribution operators in the UK.
In February 2026, CK Infrastructure, Power Assets Holdings, and CK Asset Holdings announced simultaneously that they would sell their combined 100% equity in UKPN to a subsidiary of French utility giant Engie at a ratio of 40%, 40% and 20%, with the transaction value of HK$44.3 billion, HK$44.3 billion and HK$22.15 billion respectively.
The total transaction amount exceeds HK$110 billion, setting a record for the scale of M&A in the energy and power sector of Hong Kong's capital market in the past 40 years.
If the transaction is completed smoothly, the CK Hutchison Group will obtain an investment return of more than 500%.
On the surface, this transaction is to realize cash at a high level, but in essence, it is a risk re-evaluation of the project. Regulated assets such as power distribution networks used to be regarded as "bond-like assets", that is, with stable cash flow, transferable inflation, and returns protected by the regulatory framework.
Pension funds, sovereign wealth funds and infrastructure capital all favor this type of asset. However, its weaknesses are equally obvious: the pricing power is not in the hands of shareholders. Regulators can suppress returns, politicians can impose windfall taxes, foreign investment review can block transactions, and nationalism can turn it into a political target. In the era of Globalization 1.0, capital had no national boundaries, and utility businesses could be held across borders. In the era of Geopolitics 2.0, critical infrastructure is being "re-sovereignized". The cost of foreign ownership is rising, political sensitivity is increasing, and the difficulty of exiting is also rising.
Selling UKPN to Engie of France is a very shrewd arrangement.
Engie is an intra-European player and a French utility giant. The political resistance of transactions within Europe is far smaller than selling to Chinese-funded or Hong Kong-funded entities. The asset remains the same, and the cash flow remains the same, but the "capital nationality" of the holder has changed, and the acceptance of regulators has also changed. The CK Hutchison Group has obtained high-level returns and transferred the assets to a framework with lower political resistance. This does not mean that it is not optimistic about the UK power sector, but that it has clearly calculated that the marginal risk of continued holding has exceeded the marginal return.
Then there is the EDL Energy project in Australia.
In August 2026, CK Infrastructure commissioned Morgan Stanley and Barclays to launch the sale of the controlling stake in Australian distributed energy enterprise EDL Energy. The project is valued at AUD 2 billion to 3 billion, equivalent to about HK$110.8 billion to HK$166.6 billion. EDL's main businesses include clean power, renewable natural gas and remote energy services. It seems to be a sunrise asset in the energy transition process?
However, the realistic pressure is not small: the penetration rate of renewable energy in Australia is rising rapidly, and the contradiction of power grid absorption is intensifying; remote mining power supply customers are affected by the fluctuation of the mining cycle; Australian regulators are tightening the foreign investment review of energy infrastructure.
The return curve is flattening, and the valuation is still at a relatively high level. Selling at this time is a trade-off at the level of the asset portfolio.
Therefore, the core logic of selling the UK power grid and Australian EDL is consistent: to withdraw capital from "cash flow that is politically accessible". This type of asset used to be a globalization dividend, but now it is increasingly like a geopolitical collateral, which the Li Ka-shing family has clearly understood.
Increasing Positions in Canadian Oil Sands: What Are They Buying?
On the buying side, Canadian energy company Cenovus Energy announced that it will acquire local oil company Athabasca Oil Corporation for about CAD 5.7 billion, equivalent to about RMB 26.8 billion and HK$31.4 billion. Cenovus is the second largest integrated energy company in Canada, and the single largest shareholder is the CK Hutchison and Li Ka-shing Family Trust, with a combined shareholding of about 30%. This is another move by Cenovus in Canada's oil sand producing area after completing the acquisition of MEG Energy in November 2025.
To break it down, Athabasca's core assets, the Leismer and Corner projects, are located in northern Alberta, adjacent to Cenovus's existing Christina Lake, May River and Thornbury thermal recovery operation areas.
This geographical overlap creates conditions for the integrated operation of the Steam Assisted Gravity Drainage (SAGD) model.
Athabasca currently produces about 45,000 barrels of oil equivalent per day, and its proven and probable reserves have a service life of more than 75 years.
Cenovus plans to increase Athabasca's thermal recovery production to 115,000 barrels per day by 2032 through the mature SAGD operation model. After the transaction is completed, it can achieve a synergy effect of about CAD 85 million per year, most of which will be realized in the first full year.
Adding the new daily oil sand production of about 110,000 barrels from MEG Energy, the CK Hutchison Group has pushed its daily oil production to nearly 1 million barrels through Cenovus, which is equivalent to the daily production of some countries.
Oil sand assets have shortcomings, including intensive capital expenditure and high carbon emission intensity.
But it also has extremely irreplaceable advantages: extremely long reserve life, low attenuation rate, and continuous decline in mining costs with technology iteration.
Against the background that global energy security has replaced energy transition as a priority for some countries, the strategic value of traditional oil and gas assets has been re-evaluated. Canadian oil sands are non-OPEC, non-Middle East, politically stable long-cycle resources, and are the backyard of US energy security.
Europe is re-embracing natural gas and nuclear power, the United States is pressuring OPEC+ to increase production, and various countries are subsidizing local supply chains.
Traditional oil and gas has changed from an ESG outcast to a national security asset.
There is a key change here: the high-carbon attribute of oil sands has instead restricted supply. The greater the ESG pressure, the more insufficient the capital expenditure of traditional energy, and the higher the rent of stock resources.
The more frequent geopolitical conflicts are, the higher the priority of energy security, and the scarcer long-life oil and gas assets are.
Cenovus's successive acquisitions of MEG and Athabasca are betting on this paradox. What the Li Ka-shing family buys is not only oil, but also resource rents amid geopolitical fluctuations.
What is more interesting is the transaction structure: the CK Hutchison Group did not acquire Athabasca directly, but completed the acquisition through Cenovus, a local Canadian listed company. The Cenovus board of directors passed the resolution unanimously, and the delivery still needs the approval of the Athabasca general meeting of shareholders, the Alberta court and regulatory authorities.
CK Hutchison is the single largest shareholder, holding about 30% of the shares, and does not have absolute control.
In this way, it can not only enjoy resource rents, but also reduce operational political risks. Direct acquisition of Canadian oil sands may trigger the review of the Investment Canada Act, and be amplified by opposition parties, media and indigenous groups as "foreign control of strategic resources".
Through the merger and acquisition of local companies by local champion companies, CK Hutchison is only a financial shareholder, and its political sensitivity is greatly reduced. This is a "political firewall" and also a stealth technique for capital nationality.
From the perspective of Marxist rent theory, oil sands belong to the carrier of differential rent under the monopoly of natural forces, with a reserve life of 75 years and non-replicable resource endowments. This natural monopoly brings long-term rent.
The profit of utility businesses is closer to the monopoly profit allowed by regulation, which is constrained by political distribution. Capital is shifting from "distributing profits constrained by politics" to "distributing rents supported by natural monopoly and geopolitical conflicts".
This is the double restoration of capital accumulation in space and time.
As financial capital and investment capital, the Li Ka-shing family pursues risk-adjusted returns. Capital has no motherland, but capital has a risk ledger. When the ledger changes, the position changes.
Energy Assets Are Being Re-layered
Therefore, in my opinion, this round of restructuring has released at least five signals.
First, the golden era of foreign ownership of global infrastructure has ended. Strategic assets such as power grids, gas distribution, water utilities and ports are increasingly constrained by geopolitics. The cost of foreign ownership is rising, and localization, European internalization and alignment with friendly countries have become trends. The CK Hutchison Group selling UKPN to Engie of France is exactly in line with this trend.
Second, traditional oil and gas assets have changed from "sunset assets" to "strategic options". With energy security as the priority, upstream oil and gas has become a national security contractor. Canadian oil sands, US shale, Brazilian deep-water oil and Guyanese oil fields will all get geopolitical premiums. Insufficient capital expenditure leads to lower supply elasticity. Once impacted by geopolitical conflicts, oil prices will soar, and traditional oil and gas will obtain scarcity rents.
Third, resource nationalism and local champions are on the rise. Local integrated energy companies such as Cenovus have become compliant carriers for foreign capital to share resources. It is increasingly difficult to directly control sensitive resources, and participating in local champions has become a second-best choice. Through Cenovus, the CK Hutchison Group can not only share resource rents, but also avoid direct political exposure.
Fourth, the energy transition has changed from a single track to a dual track. The long-term direction of carbon neutrality remains unchanged. In the short-term trilemma of security, affordability and green development, the weight of security is rising. Green assets rely on subsidies and policies, with unstable cash flow; traditional oil and gas relies on the global market, with strong cash flow. Capital votes with its feet. The sale of EDL and the increase of positions in oil sands exactly correspond to this dual-track logic.
Fifth, the capital of old Hong Kong conglomerates is re-globalizing. From European utility businesses to North American resources, from regulated cash flow to resource rents, from direct control to indirect equity. The CK Hutchison Group's asset portfolio has shifted from "infrastructure + utilities" to "resources + infrastructure + cash flow". This is not a retreat, but a track change.
For the market, the CK Hutchison Group cashing out hundreds of billions of Hong Kong dollars may be used for dividend distribution, share repurchase, debt reduction or re-investment.
Part of its net asset value will shift from pound sterling and Hong Kong dollar-denominated utility businesses to Canadian dollar-denominated oil and gas assets. If oil prices stay at a high level, the CK Hutchison Group's earnings will increase, and the market may revalue it as a "resource + infrastructure" hybrid entity.
Energy stocks have changed from cyclical stocks to cash flow aristocrats, with capital discipline, shareholder returns and geopolitical premiums jointly supporting their valuations.
For investors, the most important signal is that the geopolitical risk premium must be re-priced. Utility businesses are no longer risk-free bonds, and traditional energy is no longer a value trap.
The pricing power of energy assets is shifting from regulators and ESG rating agencies to resource countries, geopolitical conflicts and national security.
Of course, risks still exist. Oil sands have high carbon emission intensity, and Canada's carbon tax, indigenous rights, pipeline bottlenecks and changes in US policies are all variables.
If the world accelerates decarbonization, oil sands may face the risk of stranded assets.
The valuation of Cenovus's acquisition of Athabasca is not low, and the realization of synergy effects takes time. CK Hutchison holds about 30% of the shares and does not have controlling rights, so it cannot decide capital allocation. If oil prices plummet, resource rents will also shrink.
But the history of the Li Ka-shing family shows that they are good at cycle arbitrage.
In December 1986, Li Ka-shing acquired 52% of the troubled Husky Energy through Hutchison Whampoa for HK$3.2 billion, when the international oil price was about US$11 per barrel. This transaction was later praised by Li Ka-shing himself as "one of the most outstanding investments in my life".
In 2021, Husky and Cenovus completed an all-stock merger.
Now, after successive acquisitions of MEG and Athabasca, a complete closed loop has been formed: buying the dip at low oil prices, reducing costs through technology, industry integration, re-evaluation of energy security, cashing out utility businesses at high levels, and increasing positions in the resource side.
He is not running away, he is just one step ahead.
Ordinary investors may not have his scale, but they can understand his ledger. When politics begins to price energy assets, the quality of cash flow depends on where the cash flow is located.
This article is from the WeChat Official Account "Dongzhen Strategy", written by Dongzhen Strategy, and published with authorization from 36Kr.