BlackRock Strikes $23 Billion Deal for Ports on Both Sides of Panama Canal
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.