China’s CK Hutchison has reached a preliminary agreement to sell its international ports portfolio, including key terminals in Panama, to a consortium led by BlackRock and Terminal Investment Limited (TiL an MSC Group of Companies) for an enterprise value of $22.8 billion. This deal marks a significant shift in global infrastructure ownership and is expected to reshape the dynamics of port operations in the region.
- CK Hutchison is selling 80% of its global ports portfolio and 90% of Panama Ports Company.
- The deal is valued at $22.8 billion and is currently in the exclusive negotiation phase.
- BlackRock’s acquisition is set to be the largest infrastructure deal in its history.
- The sale aims to alleviate political pressure on Panama regarding Hutchison’s long-standing operations.
The agreement, which follows a competitive bidding process, allows BlackRock and TiL to conduct due diligence before finalizing the deal by April 2. CK Hutchison’s portfolio includes 43 ports across 23 countries, with a total of 199 berths. The company anticipates receiving over $19 billion in cash proceeds after accounting for minority interests and loan repayments.
Hutchison’s involvement in Panama dates back to 1997, coinciding with the handover of the Panama Canal. The company operates terminals at both ends of the canal—Balboa and Cristobal—and holds a concession that extends until 2047. This sale could ease tensions surrounding Hutchison’s operations, especially in light of recent political scrutiny and claims that “China is running the Panama Canal.”
BlackRock’s Strategic Move
This acquisition represents a significant milestone for BlackRock, marking its largest infrastructure investment to date. The deal is structured in collaboration with Global Infrastructure Partners (GIP), which BlackRock acquired last year. GIP specializes in energy, transportation, and waste management infrastructure, indicating a broader strategy to diversify and strengthen its portfolio.
MSC’s Expansion Plans
The MSC Group, through its terminal operator TiL, is also aggressively expanding its operations. Recently, MSC acquired a 49% stake in terminal operations in Hamburg and has made several strategic investments in key global markets. Diego Aponte, Chairman of TiL and President of MSC Group, expressed confidence in the commercial viability of the investment in Hutchison Ports.
The sale of Hutchison’s ports portfolio to BlackRock and MSC is a landmark transaction that underscores the evolving landscape of global infrastructure. As the deal progresses, it will be closely monitored for its potential impact on international trade and regional politics, particularly in Panama. This strategic shift not only reflects changing ownership dynamics but also highlights the increasing importance of infrastructure investments in the global economy.
Sources
- Hutchison Sells Panama and Other Ports in $22.8B Deal to BlackRock and MSC, The Maritime Executive.
