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Li Ka-shing's CK Hutchison to Sell Panama Canal Port to BlackRock

European M&A and Investment 2025-03-05 15:30:28

CK Hutchison to sell Panama Canal ports to BlackRock.

Image source: AFP

Due to the Panama Canal dispute triggered by former U.S. President Trump, Li Ka-shing's Cheung Kong and Hutchison Whampoa Limited hopes to sell ports at both ends of the waterway. The Chinese conglomerate stated that a consortium led by U.S. financial investor BlackRock, which also includes Global Infrastructure Partners and Terminal Investment Limited, will acquire 80% of the shares of Panama Ports Company for $14.21 billion. Panama Ports Company operates 43 ports in 23 countries.

In addition, the sale of ports still requires approval from the authorities. Hutchison Whampoa has owned and operated the ports of Balboa and Cristobal for over twenty years. The ownership agreement was automatically extended for an additional 25 years in 2021. Now, the majority of shares in these two ports will be transferred to a consortium led by BlackRock. However, Hutchison Whampoa also emphasizes that operators of ports in Hong Kong, Shenzhen, the Pearl River Delta, and other ports in China are explicitly excluded from the transaction.

The announcement did not specify the exact amount paid by the consortium for these ports. CK Hutchison only stated that the total value of the companies involved is approximately $22.8 billion, and the company expects the sale to generate over $19 billion in proceeds.

Despite an executive at Yangzijiang and** emphasizing that the deal is purely commercial, it is hard not to draw parallels with US President Donald Trump’s policies. Trump has criticized the fact that the US military has to pay usage fees for the Panama Canal and has condemned China’s excessive influence over this important waterway. The US president has repeatedly threatened to place the Panama Canal back under US control.

This waterway was constructed by the United States and became navigable in 1914. In 1977, then U.S. President Jimmy Carter and Panamanian military ruler Omar Torrijos signed an agreement to hand over the canal to Panama. In 1999, the Panamanian government took control of the canal.

In early February, U.S. Secretary of State Marco Rubio visited Panama and urged the Panamanian government to limit Chinese influence. Subsequently, Panama announced its withdrawal from China's Belt and Road Initiative, becoming the first Latin American country to exit the initiative.

The Panama Canal, as one of the most important shipping channels globally, its strategic position and economic value are self-evident. The canal allows ships to avoid the long detour around South America. The countries that use the Panama Canal most frequently are the United States, China, Japan, and South Korea.

The decision by CK Hutchison to sell its stake reflects the complexity of the current international landscape and underscores the profound impact of geopolitics on business decisions. Despite CK Hutchison's emphasis that the transaction is purely commercial in nature and unrelated to recent political news, it is undeniable that the Trump administration's tough stance on the Panama Canal played a significant role in this decision.

This incident not only affected the business interests of Yangtze and Hutchison, but also had a potential impact on the global trade pattern. The stable operation of the Panama Canal is crucial to the global supply chain, and any geopolitical uncertainty may have a profound impact on global trade. In the future, the game between China and the United States over the Panama Canal will continue, and how the Panamanian government can find a balance between maintaining sovereignty and attracting foreign investment will be the key to the development of this incident.

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Li Ka-shing's CK Hutchison to Sell Panama Canal Port to BlackRock

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