Billionaire Li Ka-shing and his family are preparing to usher in a new generation of leaders after some of their longest-serving lieutenants wrap up the sale of various assets to overhaul Hong Kong’s largest conglomerate.
Investors, bankers and business associates close to CK Hutchison Holdings Ltd. have been told that some senior executives are expected to retire after the firm completes the sale and spinoff of assets in telecommunications, ports and retail, people familiar with the matter said, asking not to be identified discussing private communications.
The changing of the guard will be a crucial test for Li Ka-shing’s eldest son Victor Li, who took control of the family business after his father retired in 2018. A new generation of executives chosen by Victor would be expected to oversee investing and deploying the capital from the asset sales, which could total at least $41 billion if completed, and help define CK Hutchison’s fate in the next era.
The 61-year-old Victor has been reshaping CK Hutchison, divesting from mature businesses to prepare the conglomerate for a world increasingly defined by geopolitical tensions and technological disruption. Most of CK Hutchison’s executives have been working for the group for more than three decades. The average age of its board of directors is about 69, one of the oldest for companies on Hong Kong’s benchmark Hang Seng Index, according to data compiled by Bloomberg.
"If they do sell these businesses, they are going to have an enormous amount of cash on the balance sheet,” said Richard Harris, founder and CEO of Port Shelter Investment Management in Hong Kong. "How are they going to mobilize that cash? What industries will they look at?”
Responsibilities at CK Hutchison are likely to be handed off bit by bit over time as retirement isn’t subject only to age but to factors including whether there are suitable successors in the pipeline, Harris said.
CK Hutchison didn’t respond to a request for comment.
The company’s shares were down 1.6% in Hong Kong on Thursday afternoon. The stock has gained 33% this year, driven by its divestment plans and anticipation for more deals to come.
Old Guard
A recent flurry of deals has been led by executives including Li Ka-shing’s 74-year-old right-hand man Canning Fok, who’s expected to retire after he oversees the completion of its telecom divestment, the people familiar said.
Fok joined Li Ka-shing in 1979 and rose to become CK Hutchison’s co-managing director, effectively the group’s chief executive. After retiring from that role in 2024, he became deputy chairman and executive chairman of the telecom business, underscoring the importance of a division he helped build into one of Europe’s largest operators.
Other veteran executives still in place include Dominic Lai, 72, who oversees A.S. Watson, and Li Ka-shing’s 79-year-old brother-in-law Kam Hing Lam, who heads the infrastructure business.
CK Hutchison has accelerated its portfolio overhaul in the past year. In May, it reached a major milestone in its exit from telecoms by selling its stake in the UK’s largest mobile operator for $5.8 billion. The group is also considering an initial public offering of health-and-beauty retailer A.S. Watson Group that could raise at least $2 billion. Earlier this year, the company and its affiliates agreed to sell the UK’s largest power distribution network for about $14 billion.
The conglomerate’s telecom divestment efforts could see a renewed boost, with UBS Group AG analysts including John Lam said this month that the sector is seeing improving valuations and a more favorable regulatory environment.
CK Hutchison’s proposed sale of 43 global ports for more than $19 billion in cash, however, has stalled as US-China tensions over strategic assets intensify, particularly over two Panama Canal terminals that have become a geopolitical flashpoint. It will likely still take time for the group to complete its divestment push as it seeks attractive valuations for its assets and navigates uncertainty surrounding the ports deal.
The next generation of leaders may need a different skill set from the veteran dealmakers who built CK Hutchison, said Vincent Lam, chief investment officer at Hong Kong-based VL Asset Management. As conglomerates increasingly focus on capital allocation and shareholder returns rather than expanding operating businesses, firms are turning to executives with investment backgrounds.
Jardine Matheson Holdings Ltd., for example, has recruited former private equity executives as part of its own shift toward portfolio management and investment returns, Lam said.
Whether Victor Li follows a similar path remains unclear, though CK Hutchison’s next phase may require executives with expertise beyond its traditional industries, according to Gary Ng, senior economist at Natixis.
"The vision of technology, geopolitical agility and sensitivity to risks can be key in a fast changing and increasingly uncertain world,” Ng said. - Bloomberg
