PSA, Hutchison enter $925 million terminals deal in Hong Kong
In a major alliance between two of the world’s global port operators, the Singapore state-controlled port group PSA and the Hong Kong-based group Hutchison have entered an agreement under which Hutchison will sell to its former rival a 20 percent stake in Hongkong International Terminals and a 10 percent shareholding in COSCO-HIT for $925 million (about HK$7.2 billion).
The deal will allow deep-pocketed PSA to strengthen substantially its presence in the Hong Kong terminal business, which it entered earlier this year with the purchase of a stake in Asia Container Terminals for about HK$3 billion ($385 million). By contrast, Hutchison is not present in the Singapore terminal business, where PSA has a monopoly.
Hutchison Whampoa, parent company of Hutchison Port Holdings, confirmed Sunday that one of its subsidiaries has signed an agreement to sell the shareholdings in Hongkong International Terminals and COSCO-HIT to PortCapital Ltd., an investment holding company backed by PSA.
Hutchison will make a capital gain of HK$5.5 billion ($710 million) on the sale of the shares in its profitable Hong Kong terminals.
Commenting on the transaction, Hutchison Whampoa group managing director Canning Fok said: “The terms of this transaction are fair and reasonable and are in the interests of the company and its shareholders as a whole.”
“We are happy that this transaction will create a strong alliance in the group’s port operations, and will put us in a position to have strategic cooperation resulting in further value creation for all parties,” he added.
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