China sells Panama ports to US hedge fund and MSC after Trump pressure

In a high-profile deal that could change the balance of power in the global port industry, a consortium of US private equity fund BlackRock and Geneva-based MSC has reached an agreement to buy the non-Chinese assets of Hong Kong-based subsidiary Hutchison Port Holdings, including the ports at Balboa and Cristobal in Panama.

The news comes after President Donald Trump made controversial allegations that the Chinese military controls the Panama Canal and that US ships are being overcharged for transit. Trump has also threatened to take action to regain control of the strategic waterway, which was handed over to Panama in 1999.

In a press release, Hutchison (stock code: 0001.HK) denied the sale was motivated by political pressure.

The same day, the US doubled tariffs on Chinese goods to 20% in an effort to pressure Beijing to stop the flow of fentanyl into the United States.

Under the deal announced on Tuesday, the BlackRock-TiL consortium will acquire Hutchison's 90% stake in port facilities in Panama, along with the Chinese company's 80% control of 199 berths at 43 ports in 23 countries.

Hutchison does not currently operate any ports in the United States.

BlackRock’s (NYSE: BLK) Global Infrastructure Partners unit is partnering on the $22.8 billion deal with Terminal Investment Limited (TiL), a company backed by MSC, the world’s largest container shipping line. The deal does not include Hutchison’s port assets in Hong Kong or China.

Hutchison is currently the world’s sixth-largest port operator, with 43 million TEUs (20-foot equivalent units) in 2023, accounting for 5% of global volumes, according to shipping analytics firm Drewry. MSC is next with 42.3 million TEUs, or 4.9%. Singapore’s PSA International is the top player with 62.6 million TEUs, or 7.2% of the market.

It is unclear how MSC’s takeover of Hutchison’s terminals will affect rival shipping lines’ operations at the ports.

The deal still needs Panamanian government approval.

MSC has not yet commented on the deal.

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Source: Phaata.com (According to Freight Waves)

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