BlackRock inks record US$23b Panama Ports deal amid Trump pressure
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The news: Hong Kong-based conglomerate CK Hutchison Holdings agreed to sell a 90% stake in Panama Ports Company and an 80% controlling interest in subsidiaries operating 43 ports in 23 countries to a consortium led by BlackRock for USD22.8 billion ($36.7 billion).
The numbers: After minority interests and shareholder loan repayments, CK Hutchison will receive about USD19 billion in cash, the companies said.
Panama Ports Company operates the ports of Balboa and Cristobal at the Panama Canal’s Pacific and Atlantic entrances.
The context: The deal follows pressure from US President Donald Trump to limit Chinese interests in the region. It also comes as Panama’s government had been weighing whether to cancel CK Hutchison’s contract and had initiated an audit.
The Trump administration and members of the US Congress were briefed on the agreement, an unnamed source told Bloomberg and The Wall Street Journal.
The acquiring consortium comprises BlackRock, it's infrastructure arm Global Infrastructure Partners, and Geneva-based Terminal Investment. The acquisition, which requires government approval, is the largest infrastructure deal in BlackRock’s history.
The sale does not involve CK Hutchison’s holdings in Hong Kong, Shenzhen, or other mainland Chinese ports.
What they said: BlackRock CEO Larry Fink in a statement said the deal highlights the firm’s ability to deliver “differentiated investments.”
“We are increasingly the first call for partners seeking patient, long-term capital,” he said.
Evan Ellis, a Latin America research professor at the US Army War College told Bloomberg that “Hutchison could see the writing on the wall, that strategically it was best for them as well for Panama to pursue its interests elsewhere.”
The sources: Joint statement, Bloomberg
