Hutchison Postpones Panama Ports Sale Amid Rising Tensions with China

CK Hutchison’s plan to offload its port operations in Panama is facing a delay. Reports from the South China Morning post and other Chinese media indicate that the anticipated signing date of April 2 for final agreements will not happen as scheduled, though this doesn’t imply that the deal is off the table.

Chinese authorities have confirmed that the State Administration for Market Regulation will be scrutinizing this transaction. According to reports, officials stated that this review aims to “promote fair competition and protect public interests.” Bloomberg added that they would also investigate any potential security or antitrust issues.

On March 4,Hutchison announced it had struck preliminary agreements with a consortium led by U.S.-based BlackRock and MSC Mediterranean Shipping Company’s TiL group, which manages terminal operations. The entire deal is valued at around $23 billion and involves selling an 80% stake in 43 ports across 23 countries outside of China. Additionally, Hutchison plans to divest a 90% interest in its Panama operations at balboa and Cristobal terminals located at either end of the Panama Canal.

The company noted that they had agreed on “basic terms” for both transactions but still needed definitive documentation. They expected to finalize paperwork regarding Panama by April 2 while entering exclusive negotiations with BlackRock-TiL.

The sale has drawn criticism from Chinese officials who perceive it as U.S. interference threatening their shipping interests. Recent reports suggest increased pressure on CK Hutchison from Beijing, including directives against new deals involving Li Ka-shing, the billionaire behind Hutchison.

Panama itself has been feeling U.S. pressure too; it recently announced plans to review this transaction as well. previously, Panama had initiated a review of its contract with Hutchison and indicated intentions to withdraw from China’s Belt & Road initiative.

Asian media hinted at ongoing discussions between Hutchison executives and Hong Kong government representatives behind closed doors. Meanwhile, Hutchison has opted not to comment publicly on these developments and even canceled an investor briefing following their year-end financial results.

former President Trump praised the port deal in Panama during his tenure, claiming credit alongside BlackRock for facilitating it while MSC has kept a low profile throughout media coverage surrounding this transaction.