Li Ka-Shing, senior consultant at CK Hutchison.
Anthony Wallace/AFP via Getty Images
Hong Kong conglomerate CK Hutchison Holdings, controlled by billionaire Li Ka-Shing, has agreed to sell its majority stake in the Panama Canal port to a consortium led by Blackstone after U.S. President Donald Trump raised concerns about people whose China’s impact on important trade territory.
Hutchison said Tuesday afternoon that it sold 90% of its Panama Port Company to BlackRock and its global infrastructure partner division, as well as Terminal Investment, the port unit of MSC, a transport giant of Swiss billionaire Gianluigi Aponte. The Panama Port Company operates the ports of Balboa and Cristobal in the Pro-Us country, which are located on both sides of the Panama Canal; Balboa is at the end of the Pacific Ocean and Cristobal is located on the Atlantic Ocean.
The deal also involved CK Hutchison's record, operating 80% of the 43 ports in 23 countries, the company said in a statement. The deal, worth $22.8 billion, would receive over $19 billion in cash gains from CK Hutchison, the statement said. The consortium has agreed that the negotiations will be held on an exclusive basis for 145 days.
On Wednesday, Hong Kong Stock Exchange's CK and Hutchison shares soared nearly 22%, raising their market cap to HK$180.4 billion (US$23.2 billion).
CK and Hutchison have been in operation for nearly three decades in Balboa (pictured) and Cristobal on the Panama Canal.
Walter Hurtdo/Bloomberg
CK and Hutchison's business operations cover ports, retail, infrastructure and telecommunications in about 50 countries, have been arrested by the Political Crosshair in recent months. It began in December when Trump threatened to reaffirm U.S. control of the Panama Canal, which handles about 5% of global trade every year. Trump accused Panama of accusing the United States of the largest user of the canal (excessive interest rates) and claimed that Central American countries had ceded control of China's waterways. China and Panama deny this claim.
A US-Panama Treaty signed in 1977 requires the Panama Canal to remain neutral behind a transport lane built by the United States that Washington handed over to Panama in 1999.
In a joint Congressional speech in Washington, D.C. on Tuesday, Trump touted the BlackRock deal, buying two Panama Canal ports. “The Panama Canal was built by Americans for Americans and not others. But others can use it,” Trump said. “The agreement (the 1977 treaty) was seriously violated. We did not hand it over to China. We gave it over to Panama and we are getting it back.”
Frank Sixt, co-management director of CK Hutchison, said in a statement that the deal was “purely commercial in nature and had nothing to do with the recent political news coverage about the port of Panama.”
CK Hutchison is the largest port operator with the Panama Canal market share, followed by the US SSA Marine Corps, Taiwan Evergreen and Singapore PSA. The Hong Kong-based conglomerate has been operating at the port for nearly three decades at two entrances to the Panama Canal.
In the first half of 2024, CK and Hutchison generated 20% of HK$28.8 billion before interest and were taxed from their port operations, making them the company's third largest business. During the same period, it received HK$21.6 billion in revenue from port operations, with 82% of which came from ports outside mainland China and Hong Kong.
“The deal will remove business uncertainty for CK and Hutchison and provide them with an additional $19 cash gain in search of new mergers and acquisitions,” said Denise Wong Wong, a Bloomberg intelligence analyst. “The company has the ability to provide portfolio assets that are less prone to geopolitical tensions.”
More from Forbes
