TheChek News Flow

Deal worth $22.8bn involves sale of bulk of ports owned by Hong Kong-based conglomerate CK Hutchison

BlackRock has agreed to buy two major ports on the Panama Canal from their Hong Kong-based owner as part of a $22.8bn deal, following pressure from Donald Trump over alleged Chinese influence at the vital waterway.

Under the agreement, the ports’ Hong Kong-based owner CK Hutchison would sell the business to a consortium including BlackRock, Global Infrastructure Partners and Terminal Investment Limited, according to a company statement on Tuesday. The group would acquire a 90 per cent stake in the company that owns and operates the two ports in Panama.

Trump has frequently alleged that “China is running the Panama Canal”, and rattled Panama when he threatened earlier this year to “take it back” under American control. The Trump administration has also demanded Panama reduce Chinese influence at the canal, claiming Beijing’s involvement in the ports had violated a treaty concerning its neutrality.

The deal announced on Tuesday also includes an 80 per cent stake of CK Hutchison’s ports subsidiaries, which run 43 ports in 23 countries, including in the UK and Germany. It also runs ports in south-east Asia, the Middle East, Mexico and Australia.

The remaining 20 per cent stake is held by port operator PSA, which is owned by Temasek, the Singapore sovereign wealth fund.

CK Hutchison said it expected to receive cash in excess of $19bn from the deal, a figure that includes repayment of some shareholder loans. CK Hutchison’s market capitalisation is HK$148bn ($19bn).

Trump’s election victory last November and his calls for the US to retake control of the canal prompted CK Hutchison to consider the sale, sparking a short and intense period of negotiations for the ports, according to people briefed on the discussions.

“When President Trump won and he started making noise about annexing Canada and Greenland and Panama, the pressure was put on the Panamanians,” one person familiar with the deal said. The person added that CK Hutchison “realised that it was a political headache and they wanted to do something”.

To navigate the potential political fallout, BlackRock chief executive Larry Fink briefed senior leaders in the Trump administration, including the president, to secure their backing for the takeover, two people briefed on the matter said. One of the people added that the consortium would not have gone forward with its bid if they believed the US government would not support the deal.

Controlled by Hong Kong’s richest man Li Ka-shing and his family, CK Hutchison has a portfolio of ports, retail, telecoms and other infrastructure. Ports operations made up about 9 per cent of CK Hutchison’s total revenue of HK$461.6bn in 2023.

The canal has become a flashpoint in Trump’s first weeks in office, as the US president looks to expand the country’s borders and take control of infrastructure assets — roiling allies and countries that had profited from decades of growing free trade.

The deal with BlackRock comes after the asset manager’s acquisition of GIP, which helped make the firm a force in infrastructure investing.

The strategically important waterway is run by the Panama Canal Authority, an arm of Panama’s government. It was built by American engineers and run by the US from its opening in 1914 until a treaty in 1977 agreed a staged handover to Panama, which was completed in 1999.

Hong Kong-based Hutchison Ports, one of the world’s biggest operators of container terminals, has managed the ports at either end of the canal since 1997 under concessions from Panama’s government.

The facilities have often attracted political comment from US politicians who have alleged that CK Hutchison’s role means China in effect controls the canal.

The facilities mainly operate as “trans-shipment” ports where containers are moved between ships transiting the canal and smaller “feeder” ships shuttling to destinations around the Caribbean and the Pacific coast of South and Central America.

CK Hutchison arranged a new concession to keep operating the ports for another 25 years as recently as 2022.

Agency plans changes that will make Elon Musk’s satellite-internet service eligible for more rural broadband funding

The Commerce Department is examining changes to a $42.5 billion Biden-era program aimed at expanding internet access around the country with new rules that will make it easier for Starlink, Elon Musk’s satellite-internet service, to tap in to rural broadband funding, said people familiar with the plans.

Commerce Secretary Howard Lutnick has told staff he plans to make the grant program “technology-neutral,” the people said. That change will free up states to award more funds to satellite-internet providers like Starlink, rather than mainly to companies that lay fiber-optic cables, to connect the millions of U.S. households that lack high-speed internet service.

Republicans have said the Broadband Equity, Access and Deployment Program, created by the 2021 infrastructure bill, has moved too slowly and is bogged down by unnecessary rules. Those rules effectively said states could only fund alternative technologies such as satellite in areas where it wasn’t feasible or cost-effective to lay fiber cables.

The potential new rules could drastically increase the share of funding available to Starlink. Under the BEAD program’s original rules, Starlink was expected to get up to $4.1 billion, said people familiar with the matter. With Lutnick’s overhaul, Starlink, a unit of Musk’s SpaceX, could receive $10 billion to $20 billion, they said.

Representatives for the Commerce Department and Starlink didn’t immediately respond to a request for comment Tuesday.

The overhaul could be announced as soon as this week, possibly without some details in place, the people said. Following any changes, states may have to rewrite their plans for how to spend their funding from the program, which could delay the implementation.

Lutnick told staff he plans to do away with other BEAD program rules, including some related to climate impact and sustainability, as well as provisions that encouraged states to fund companies with a racially diverse workforce or union participation, the people said.

The program requires internet-service providers that receive funding to offer affordable plans for lower-income customers. Lutnick has told staff he is considering reducing those obligations, the people said.

Arielle Roth, Trump’s nominee to lead the Commerce Department bureau that oversees the internet-access program, has been critical of the rules governing it—and of the bureau itself.

Roth, speaking as a policy director on the Senate Commerce Committee under Sen. Ted Cruz (R., Texas), said last year that Congress had created the program “in a technology-neutral manner,” but that the bureau, the National Telecommunications and Information Administration, “imposed extreme tech bias in favor of fiber.” She also said the bureau pushed a “woke social agenda” on the program.

Under Biden, the program favored fiber because the bureau thought it provided more reliable service and more durable infrastructure than other technologies.

Starlink has more than 7,000 satellites orbiting Earth. The company says it serves more than five million homes, businesses and vehicles around the world, including many in rural America. Despite its high price tag—a dish costs several hundred dollars, plus a $120 monthly service fee—Starlink has gained a loyal following because it works in areas where fiber service isn’t available.

Many broadband providers worried the Musk-led Department of Government Efficiency would eliminate or reduce the program’s funding. Given the overhaul, fiber broadband providers may not benefit from it as much as they expected because non-fiber technologies are poised to receive more funding than before.

Starlink lobbied the Commerce Department to change the program’s rules last year but halted its lobbying after Trump took office, said people familiar with the matter.

A consortium of investors is buying a majority stake in the ports from CK Hutchison

A consortium of investors led by BlackRock has agreed to buy majority stakes in ports on both sides of the Panama Canal from CK Hutchison for $22.8 billion, the companies said Tuesday.

The deal would bring the key ports under American corporate ownership, from Hong Kong-based CK Hutchison. The Panama Canal is controlled by Panama, but foreign-owned ports on either side have been flagged as a threat by the Trump administration.

BlackRock has briefed the Trump administration and Congress on the deal, said a person familiar with the matter.

“China is operating the Panama Canal, and we didn’t give it to China,” Trump said in his inaugural address, referring to the 1977 treaty that handed control of it to Panama.

American opposition to the current ownership structure centers on concerns China could use the ports for military purposes, including monitoring of ship movement. Panamanian officials, and several former U.S. military officials, have said that the Chinese facilities didn’t represent a military threat or breach the canal’s neutrality.

The U.S. built the Panama Canal, which opened in 1914, and relinquished it to Panama in late 1999 under a treaty negotiated more than 20 years earlier with then-President Jimmy Carter. Trump has long said the deal was bad for the U.S. and has complained about the fees Panama charges and Chinese infrastructure built up along the waterway.

BlackRock, its new infrastructure arm Global Infrastructure Partners, and Geneva-based Terminal Investment agreed to acquire a 90% interest in Panama Ports. The company owns and operates the ports of Balboa and Cristobal in Panama. The consortium also agreed to buy CK Hutchison’s controlling interest in 43 other ports in 23 countries.

If completed, the BlackRock deal could go a long way toward easing concerns about China’s influence over the canal.

CK Hutchison said that the sale was part of a “competitive process in which numerous bids and expressions of interest were received.”

“I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” said Hutchison co-managing director Frank Sixt.

In acquiring GIP last year, Chief Executive Larry Fink bet that private infrastructure assets would help drive his firm’s next wave of growth. GIP operates energy, transportation, and waste and water companies around the world, along with London Gatwick Airport, U.S. natural-gas pipelines and data centers.

The CK Hutchison deal is the largest-ever infrastructure acquisition for BlackRock or GIP.

Panama Canal ports sold to BlackRock in victory for Donald Trump

Deal involves sale of bulk of ports owned by Hong Kong-based conglomerate CK Hutchison

BlackRock has agreed to buy two major ports at the Panama Canal from their Hong Kong-based owner, following pressure from Donald Trump over alleged Chinese influence at the vital waterway.

In apparent reference to the ports, the US president has frequently alleged that “China is running the Panama Canal”, adding last month that “we’re going to take it back, or something very powerful is going to happen”.

The ports’ Hong Kong-based owner CK Hutchison will sell the business to a consortium including BlackRock, Global Infrastructure Partners and Terminal Investment, according to a company statement on Tuesday.

In a large-scale investment in the sector, the consortium will acquire a 90 per cent stake in the CK Hutchison subsidiary that operates the two ports in Panama.

The deal also includes an 80 per cent stake of CK Hutchison’s ports subsidiaries, which run 43 ports in 23 countries, including the UK and in Germany.

Conciliatory statement comes after White House clash led to abandonment of plan to sign agreement

Volodymyr Zelenskyy has said that Ukraine remains committed to signing a minerals deal with the US “at any time and in any convenient format”.

In a conciliatory post on X on Tuesday, the Ukrainian leader expressed regret over his clash at the White House with US President Donald Trump and his vice-president JD Vance last week, which led to plans to sign a deal over Ukraine’s minerals being abandoned.

“Our meeting in Washington, at the White House on Friday, did not go the way it was supposed to be,” Zelenskyy wrote.

“Regarding the agreement on minerals and security,” he added. “Ukraine is ready to sign it in any time and in any convenient format. We see this agreement as a step toward greater security and solid security guarantees, and I truly hope it will work effectively.”

The private-equity firm is buying Quorum Software from Thoma Bravo

Private-equity firm Francisco Partners struck a deal for Quorum Software, a maker of software for the oil-and-gas industry owned by buyout firm Thoma Bravo.

The details

The deal is expected to value Quorum at $2.4 billion, including debt, according to people familiar with the matter. A transaction was announced Tuesday, confirming an earlier report from The Wall Street Journal.

Houston-based Quorum’s software helps customers across energy sectors in areas including financial planning, well management and land management, according to its website.

Thoma bought Quorum from private-equity firm Silver Lake for an undisclosed amount in 2018.

Quorum scaled quickly under Thoma’s ownership. The business pursued deals, including a merger with a Thoma portfolio company, Aucerna, and acquisition of Energy Components, a piece of the Finnish software business Tietoevry, to create a bigger leader in the energy software space.

The context

Other deals between buyout firms have been struck this week.

Clearlake Capital said Monday it would buy a stake in healthcare software firm Modernizing Medicine, from Warburg Pincus. Genstar Capital also announced a deal for a controlling stake in First Eagle Investment Management, from its private-equity backers Blackstone and Corsair Capital.

Overall activity is at multidecade lows, however. Deal announcements in the first two months of the year were down over 26% from 2024, according to Dealogic. It is the fewest deal announcements over the same period since 2005.

Francisco Partners focuses its investments on technology and technology-enabled businesses.

About a year ago, it bought Jama Software from shareholders including Insight Partners and Madrona Ventures for $1.2 billion.

“Francisco Partners had already done a lot of work in the sector before we connected, and so this made a nice match,” Quorum CEO Paul Langenbahn said in an interview.

Write to Lauren Thomas at lauren.thomas@wsj.com

Corrections & Amplifications

Quorum pursued deals including an acquisition of Energy Components, a piece of the Finnish software business Tietoevry. An earlier version of this article incorrectly said Quorum acquired a piece of Energy Components. (Corrected on March 4)

Move marks latest step in long-running debate over project’s wildlife protection measures

EDF is considering reviving plans to install a so-called fish disco in the Bristol Channel to ward off marine life approaching its nuclear plant Hinkley Point C.

The French state-owned company has written to communities around the project, being built in Somerset, saying new technology could make its planned “acoustic deterrent” system “safe and effective”. 

The move marks the latest step in a long-running saga over the plant’s fish protection measures, which has become emblematic of a wider national debate between development and environmental protection measures. 

This week, the Financial Times reported that the final price tag for a tunnel to protect bats from the High Speed 2 rail network between London and the West Midlands is about £119mn in today’s prices — a fifth higher than previously thought. 

EDF proposed an “acoustic deterrent” as part of its original plans for the 3.2-gigawatt power station. The system was devised to protect fish at risk of being sucked into the plant’s machinery as it draws in water for cooling. 

But the company has for several years been trying to ditch the proposal, arguing it would endanger divers having to install and maintain the system, and may not be effective. It proposed to instead develop salt marshes to shelter shoals.

The move drew criticism from campaigners who argue there would be a “significant” impact on marine species without the deterrent. EDF has rejected this characterisation, pointing to regulators’ estimates that the number of fish harmed would be relatively small. 

Hinkley Point C is already several years delayed and billions of pounds over budget, and EDF warned the long-running process over fish protection could cause further setbacks. 

In their letter to local communities, sent last week and seen by the FT, Andrew Cockcroft, head of stakeholder relations at Hinkley Point C, said it had “recently become aware” of innovation that meant a new type of deterrent could be installed. 

“The technology, pioneered in the south-west, is proven and deployed internationally [ . . . ] We are now working with experts to provide the scientific data to underpin the case for using it at Hinkley Point C,” he said.

EDF will “pause all design and development work on salt marsh creation” in the meantime, he added. 

Mark Lloyd, chief executive of The Rivers Trust, said it welcomed this “about turn by EDF to honour their commitment to install a fish deterrent in this very sensitive environment after trying to wriggle out of it”.

He added: “We will have to see what they propose and assess its efficacy in due course.”