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China to review sale of Panama Canal shipping terminals to US investor: Report

Sale includes terminal operations at ports of Balboa and Cristobal

Stuart Chirls
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Supply chain disruptions could develop if the drought in Panama continues. (Photo: Shutterstock/Diego Grandi)
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Key Takeaways:

  • China's State Administration for Market Regulation will review the $23 billion sale of Panama Canal-linked port operations from CK Hutchison to a consortium led by BlackRock and MSC.
  • This review is unusual, as it's not standard procedure for Hong Kong companies, and follows public opposition from Beijing and warnings against deals involving Li Ka-shing.
  • The sale includes terminal operations in Balboa and Cristobal, Panama, and has faced scrutiny from both Chinese and Panamanian authorities.
  • While the deal hasn't been canceled, the Chinese review and previous public opposition have caused a delay from the initially announced April 2nd closing date.
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In an unusual move, regulators in China will review the sale of port operations linked to the Panama Canal to a consortium led by a U.S. investor.

China’s State Administration for Market Regulation posted comments on its website that it planned to review the $23 billion sale by Hong Kong-based CK Hutchison to BlackRock and ocean carrier MSC, based in Geneva.

The review was first reported by the Financial Times, which added that such a review of Hong Kong companies was out of the ordinary.

Earlier reports said Hutchison (OTC: CKHUF), controlled by billionaire Li Ka-shing, would not sign off on the deal April 2 as announced March 4 when it proposed selling control of its Hutchison Port Holdings marine terminals outside China to BlackRock (NYSE: BLK) and TiL, the terminals arm of MSC, the world’s largest container liner operator.

The sale, which includes terminal operations at the ports of Balboa and Cristobal in Panama, followed public pressure from President Donald Trump, who has said the U.S. should retake control of the Panama Canal.

Panama is also scrutinizing the Hutchison port concessions.

The delay follows weeks of public opposition to the sale by Beijing. The agreement has not been scrapped, according to reports in the South China Morning Post and Reuters.

Earlier, Chinese authorities warned away state-owned firms from any new deals connected to Li and his family, Bloomberg reported.

Mustafa Riffat, managing director of BlackRock’s Global Infrastructure Partners investment unit, confirmed to FreightWaves that the proposed sale only includes terminals, and that the company would have no other comment.

CK Hutchison did not immediately respond to requests for comment.

This article was updated March 30 to add comments from a BlackRock spokesman.

This article was updated March 29 to add that China will review the proposed sale of port terminals by CK Hutchison.

Find more articles by Stuart Chirls here.

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Stuart Chirls

Stuart Chirls is a journalist who has covered the full breadth of railroads, intermodal, container shipping, ports, supply chain and logistics for Railway Age, the Journal of Commerce and IANA. He has also staffed at S&P, McGraw-Hill, United Business Media, Advance Media, Tribune Co., The New York Times Co., and worked in supply chain with BASF, the world's largest chemical producer. Reach him at stuartchirls@firecrown.com.