A consortium of companies controlled by Hong Kong tycoon Li Ka-shing agreed to pay GBP5.8 billion ($9.05 billion) for Electricite de France SA's (EDF.FR) U.K. electricity distribution networks, in the biggest acquisition in the U.K. by a Hong Kong entity, a person familiar with the situation said Friday.

The deal is Li's fifth investment in the U.K. and comes as Hong Kong's richest man has been increasing his investments in the utility sector overseas--including in New Zealand, Australia and Canada--in recent years to broaden the earnings base of his companies given the difficulties in expanding in Hong Kong's mature market.

The consortium, which includes Cheung Kong Infrastructure Holdings Ltd. (1038.HK), Hongkong Electric Holdings Ltd. (0006.HK) and the Li Ka Shing Foundation, outbid U.K. utility Scottish & Southern Energy PLC (SSE.LN) and a consortium comprising sovereign-wealth fund Abu Dhabi Investment Authority, Macquarie Capital and Canada Pension Plan, the person said.

The deal is expected to be completed in the fourth quarter, the person said.

EDF is selling its three U.K. low-voltage distribution grids as part of a plan to reduce its debt.

The person said Li may have to consider raising funds for the purchase.

CKI, which is leading the consortium, had cash and bank deposits totaling about US$1.28 billion at the end of June, while Hongkong Electric had about US$606 million.

CKI and Hongkong Electric already own stakes in two water-supply projects in the U.K., as well as a gas distribution network and a power station.

The CKI consortium hired Royal Bank of Scotland Group PLC (RBS) as its financial adviser, while EDF hired Barclays PLC (BCS), Deutsche Bank AG (DB) and BNP Paribas SA (BNP.FR) to handle the deal.

CKI and Hongkong Electric couldn't immediately be reached for comment.

Shares of CKI and Hongkong Electric were suspended from trading in Hong Kong on Friday pending an announcement of price-sensitive information. The companies didn't give any details.

The offer involves the third-biggest acquisition of Europe-based assets so far in 2010, according to data from Dealogic, after Swiss pharmaceutical company Novartis AG's offer in January to buy eye-care firm Alcon Inc. for US$39.28 billion, and News Corp.'s proposal in June to acquire a majority stake in British Sky Broadcasting Group PLC for US$13.53 billion.

-By Aries Poon, Dow Jones Newswires; 852-2832-2332; aries.poon@dowjones.com
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