Shanghai Electric Pulls Out of $1.77 Billion Deal to Acquire K-Electric

In a significant turn of events for Pakistan’s energy sector, Shanghai Electric Power (SEP) has officially terminated its $1.77 billion deal to acquire a majority stake in K-Electric (KE), one of Pakistan’s largest utility companies. The decision was disclosed in a notice issued by SEP to the Shanghai Stock Exchange on Wednesday. The deal, which had been in the works for years, involved SEP purchasing 18,335,542,678 shares of KE from KES Power Ltd. This represented a 66.40% stake in KE’s total issued share capital. The transaction also included a provision for SEP to offer up to $27 million in performance-based incentives to the seller or its designated party, contingent on KE’s operational performance. According to SEP’s statement, the decision to abandon the acquisition was driven by a combination of factors, including the counterparty’s repeated failure to meet preconditions for closing the deal and evolving challenges in Pakistan’s business environment. These factors, SEP said, rendered the transaction incompatible with the company’s international development strategy. “Since the inception of this major asset purchase, the company has strictly adhered to relevant laws, regulations, and regulatory requirements while actively advancing all aspects of the transaction,” the notice stated. “However, given the counterparty’s consistent inability to fulfill closing preconditions and the changing business environment in Pakistan, the company has decided to terminate this acquisition to safeguard the interests of its shareholders.” The decision was approved during a meeting of SEP’s Board of Directors on September 9, 2025. The board reviewed and passed a resolution titled “Terminating and Writing Off the Equity Acquisition of KE Pakistan,” formally ending the long-anticipated deal. SEP emphasized that the termination of the acquisition would not have a significant adverse impact on its operations or financial health. “From its initiation to its termination, this transaction did not result in any significant adverse changes to the company’s production, operations, or overall business environment,” the notice clarified. The deal, first announced in 2016, had faced numerous regulatory and operational hurdles over the years, including delays in obtaining approvals from Pakistani authorities. The acquisition was seen as a potential game-changer for KE, which serves Karachi, Pakistan’s largest city, and its surrounding areas.