Negotiations for the sale of Panama Canal port facilities and operations at 40 other ports hit a dead end after China demanded a controlling interest as a condition of the deal.
Beijing is demanding that state-owned shipping line Cosco get a controlling stake in the $22.8 billion sale of CK Hutchison Holdings (0000.HK), the Hong Kong conglomerate owned by billionaire Li Ka-shing.
China in April blocked the sale, which includes terminals at the Panamanian ports of Cristobal and Balboa, near the Panama Canal, saying it planned a formal review.
The Panama ports are at the center of a geopolitical tug of war after President Donald Trump threatened to take back control of the Panama Canal, which he claimed was under China’s control. Cosco has also been a target of the administration, after a U.S. probe found Beijing leveraged anti-competitive measures to build a dominant position in shipping and shipbuilding.
The development was reported by the Wall Street Journal, citing sources familiar with the negotiations.
U.S. investor BlackRock (NYSE: BLK) and privately-held Mediterranean Shipping Co. of Geneva which had earlier cinched a purchase of Hutchison, agreed to offer Cosco (1199.HK) an equal share, the report said. But negotiations hit a dead-end after China’s new demands.
BlackRock had no comment, a spokesman said in an email to FreightWaves. Cosco did not immediately respond to messages. A Hutchison spokesperson was not available for comment.
The Hutchison sale agreement in principle covers terminals at a network of 43 ports across 23 countries.
Find more articles by Stuart Chirls here.
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