Hong Kong's largest electricity provider CLP Holdings said it will buy stakes in two units of Exxon Mobil Corp. The deal valued at USD 1.8 billion or HKD 14 billion will add three power plants in Hong Kong. In a statement, CLP Holdings said it will purchase a 30% stake in Castle Peak Power Co for HKD 12 billion. It will also buy a 51% stake in Hong Kong Pumped Storage Development Co for a price tag of HKD 2 billion. Castle Peak Power is the owner of the plants in Hong Kong. Meanwhile, Exxon Mobil will also be selling another 30% Castle Peak Power stake to China Southern Power Grid Co.

CLP said the deal will enable the company to coordinate its generation business in Hong Kong with its transmission and distribution business more effectively. With the latest transaction, CLP now holds a 70% stake in the 6,908-megawatt generating capacity of Castle Peak.

In March last year, CLP Holdings said that it was in discussions with Exxon to purchase Castle Peak. The acquisition was set to be done together with China Southern. However, CLP revealed in its preliminary 2012 annual report that the parties were experiencing a considerable gap in valuation, which led to protracted negotiations.

CLP said the financial advisers for the deals were Evercore Partners Inc and HSBC Holdings. According to Bloomberg, CLP gained 0.9% to HKD 62.25 per share as of 10:41 AM in Hong Kong. The benchmark Hang Seng Index increased 0.5%.

This month, The Standard Newspaper reported that the power unit of CLP filed an application to increase electricity tariffs in Hong Kong in 2014. The report added that in January, CLP had increased prices by 5.9%.

CLP Holdings also has energy generation and retailing businesses in Australia in addition to providing vertically-integrated electricity supply in Hong Kong, according to information from Bloomberg.