Hutchison Sells Panama and Other Ports in $22.8B Deal to BlackRock and MSC
China’s CK Hutchison announced that it has an agreement in principle to sell its international ports portfolio including the controversial terminals in Panama to a consortium being led by famed U.S. investment group BlackRock in partnership with Terminal Investment Limited (TiL), MSC Group’s terminal operator. The deal valued at $22.8 billion (enterprise value) is for 80 percent ownership of CK Hutchison’s portfolio of 43 global ports and in a parallel agreement for 90 percent ownership of Panama Ports Company, which operates the terminals in Balboa and Cristobal, Panama.
The companies emphasized that it is a preliminary agreement after a bidding process run by CK Hutchison, but they have entered into exclusive negotiations and a non-disclosure arrangement. The BlackRock-TiL Consortium is conducting confirmatory due diligence with the companies targeting signing the definitive agreements on or before April 2.
The sale could be seen as a victory for Donald Trump who repeatedly asserted that “China is running the Panama Canal.” Panama had responded by saying it was reviewing the contracts with Hutchison and the country’s Attorney General recently filed a brief in a court case calling the contract extension granted to Hutchison in 2021 “unconstitutional.”
This transaction is “purely commercial in nature and wholly unrelated to recent political news report concerning the Panama Ports,” asserted CK Hutchison Co-Managing Director Frank Sixt commenting on the transaction.
The portion of the agreements for the Panama terminals will require confirmation by the Government of Panama of the proposed terms. The Wall Street Journal reports that BlackRock has briefed the Trump administration and the U.S. Congress on the planned acquisition.
“This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received,” highlighted Sixt. He called the valuation compelling and said the deal was in the best interest of the company’s shareholders. It includes 43 ports with a total of 199 berths in 23 countries.
CK Hutchison expects to receive cash proceeds in excess of $19 billion from the transactions after minority interest and the repayment of loans. The company emphasized the agreements do not include any interest in the HPH Trust, which operates ports in Hong Kong, Shenzhen, South China, and other ports in China.
The Wall Street Journal is reporting the deal would be the largest-ever infrastructure acquisition for BlackRock. It is being structured between BlackRock and the recently acquired Global Infrastructure Partners (GIP), which became part of the company last year. GIP focuses on energy, transportation, and waste and water infrastructure including acquisitions in 2024 in the U.S. offshore wind energy sector.
MSC has been moving aggressively to expand all parts of its business, including the terminal operations. It recently completed a deal with the City of Hamburg to acquire 49 percent of the terminal operations in Hamburg in addition to deals last year for terminals in key global markets.
Commenting on today’s announcement, Diego Aponte who is Chairman of TiL and President of the MSC Group said, “We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially.”
The sale would likely reduce pressure on Panama. Hutchison’s involvement with Panama dates to 1997 and the time of the handover of the canal under the treaty with the United States. The company operates terminals at each end of the Panama Canal, in Balboa and Cristobal, and currently holds a concession that was extended until 2047.