Panama Canal Ports at Both Ends Operated by CK Hutchison Acquired by BlackRock – News Update

In Hong Kong, shares of CK Hutchinson bounced 22% higher, leading Wednesday’s rally that left the Hang Seng Index up 2.8%. It gained another 9.5% on Thursday. Shipping giant MSC is now set to become the world’s largest terminal operator as a result of this BlackRock deal that was brokered by Goldman Sachs. Once the BlackRock consortium showed interest in the port assets, there was a rush to sign a memorandum of understanding and file it to the Hong Kong stock exchange ahead of Trump’s address to Congress in Washington DC.  Panamanian authorities were not involved in the deal. “A transaction like this cannot be completed in two days,” said Panama’s Minister of Trade and Industry, Julio Moltó, referring to the recent purchase of the Hong Kong conglomerate CK Hutchison by the American fund manager. BlackRock executives including Chief Executive Laurence Fink briefed Trump, Commerce Secretary Scott Bessent, Secretary of State Marco Rubio and other officials to earn support for the deal. 

Asset manager BlackRock and Larry Fink have bought some conservative credibility along with its purchase of two critical ports on both sides of the Panama Canal to get back in Republicans’ good graces.  BlackRock has been restricted, or outright banned, by a number of Republican-led states from managing retirement or treasury funds over the company’s policies on environmental, social and corporate governance (ESG) investing.  The sale helps boss Larry Fink shore up his infrastructure strategy and provides the Hong Kong-based conglomerate a useful escape from political crosshairs.  The deal seems like a welcome reprieve for other reasons, too. Panamanian authorities were planning to audit CK’s contract while the country’s attorney general deemed the concession “unconstitutional.”  Panama quit China’s Belt and Road Initiative following Marco Rubio’s visit to Panama, drawing condemnation from Beijing.  Belt and Road is Beijing’s global development strategy to build roads, ports and railways to open up new markets.

The transactions will be carried out separately once the Government of Panama confirms the proposed terms for the purchase and sale.  The BlackRock-TiL Consortium and CK Hutchison reached an agreement in principle Tuesday, under which the BlackRock-TiL Consortium will acquire HPH’s 90% stake in Panama Ports Company, a subsidiary of a Hong Kong- based multinational that operates two ports adjacent to the Panama Canal, for $22.8 billion.  The consortium will also acquire CK Hutchison’s effective and controlling 80% stake in subsidiaries and associate companies that own, operate and develop a total of 43 ports comprising 199 berths in 23 countries, together with all of HPH’s management, operations, terminal operating systems, IT and other systems resources, and other assets related to the control and operations of those ports.  The BlackRock-TiL Consortium is also buying port operations in 20 other countries.

However, this latest transaction does not include any interest in the HPH Trust, which operates ports in Hong Kong, Shenzhen and South China, or any other port in China. Final documentation of the transaction is expected to be signed on or before April 2, 2025.  The transaction will be completed separately once the Government of Panama confirms the proposed terms for the purchase and sale. The acquisition will be completed in an expedited manner, subject to the BlackRock-TiL Consortium performing normal and customary confirmatory due diligence, the settlement of definitive documentation, and the receipt of necessary regulatory approvals, among others.  Pending the signing of the final documents, CK Hutchison and HPH have entered into exclusive negotiation and confidentiality agreements with the BlackRock-TiL consortium, which will have full access to the information and documentation for the purposes of conducting confirmatory due diligence.

Blackrock Chairman and CEO Larry Fink pictured above, said the deal is “a powerful illustration” of Blackrock and GIP’s combined platform and ability to deliver differentiated investments for clients. “These world-class gateways facilitate global growth. We are thrilled that our clients can participate in this investment,” he said. On behalf of Global Infrastructure Partners (GIP), a part of BlackRock, GIP President and CEO Bayo Ogunlesi said they are “delighted” to partner with Terminal Investment Limited and MSC, with whom they have a long-standing and productive relationship, to bid for certain interests in ports owned and operated by Hutchison Ports Holdings.  “Given GIP’s significant experience in owning and operating ports, together with our partners, we can focus on our joint ambition to see these assets remain world-class port operators that are competitive, efficient, commercial and service-focused,” he added.