Report: COSCO Seeks “Powerful Role” in Talks for Hutchison Terminal Sale
Chinese officials are reportedly seeking a key role for COSCO as part of the talks to resolve the concerns over the proposed sale of CK Hutchison’s terminal operations in Panama and 41 global ports. Bloomberg reports China has set a new condition to give COSCO the ability to block unfavorable decisions as part of the talks designed to gain Chinese support for the deal, which was first announced in March and is still pending approval.
According to unnamed sources, Bloomberg reports COSCO “is asking to have veto rights or equivalent powers in the entity,” that would be formed by BlackRock and MSC’s Terminal Investments Ltd. The sources told Bloomberg, “COSCO has argued such rights are necessary to block any decisions that are potentially harmful to China’s interests.”
Chinese officials have repeatedly accused the United States of orchestrating the deal as part of Donald Trump’s assertions that China controls the Panama Canal. They have frequently linked the deal to efforts by the U.S. to interfere with China’s international trade.
These latest developments come just days before the exclusive negotiation period between CK Hutchison and the group formed by BlackRock and TiL is due to expire. The lockup was for 145 days and, as such, should be over, unless extended, on July 27.
Bloomberg has previously reported that the end of the lockup would clear the way for resetting the terms of the two deals. It is now reporting that while the talks are continuing, BlackRock and TiL agreed that COSCO “should have full information access to the operation.” Bloomberg speculates the terms of a new three-way deal could be settled by the end of September.
The original deal announced in March called for BlackRock to lead the acquisition of the two terminals in Panama, located at each end of the Panama Canal. It was seen as a face-saving move for Trump, who has said the U.S. would regain dominance over the Panama Canal. The companies would acquire Hutchison’s 90 percent interest in the Panamanian company, with the country continuing to hold its 10 percent ownership stake.
MSC’s TiL would be the lead investor along with BlackRock in the other global terminal operations. CK Hutchison would retain its terminals in China and Hong Kong.
Chinese officials have said the deal is under review while publicly asserting it would harm Chinese interests. They accused Hong Kong billionaire Li Ka-shing of being disloyal and acting against the state in the proposed sale. Bloomberg has reported that China told state-owned firms to hold off on any new business deals with the Li family until the ports sale is resolved.
News that China was seeking a role for the state-owned COSCO in the deal was first reported in June as a possible face-saving step. COSCO is a logical company to lead the Chinese portion, as its COSCO Shipping Ports as of December 31, 2024, operated and managed 375 berths at 39 ports globally, of which 226 were for containers, with an annual handling capacity of approximately 124 million TEU.