BlackRock Announces Deal To Operate Panama Canal Ports

A group of investors led by BlackRock has agreed to take over operation of two ports at either end of the Panama Canal for a deal worth between $19 billion and $22.8 billion, according to multiple news reports. The ports had been operated by CK Hutchinson Holdings Limited, a Hong Kong-based Chinese port investor, developer and operator that has had a strong presence in many of the world’s busiest container ports—until now. BlackRock, its recently acquired Global Infrastructure Partners (GIP) and Terminal Investment Limited purchased a 90 percent stake in CK Hutchinson’s Panama Ports Company, which owns and operates the Balboa and Cristobal ports in Panama.

CK Hutchison has run the ports since Panama’s government privatized them in 1996. Hutchinson’s history goes back to 1866 when it became the first company registered in British colonial Hong Kong. The company is controlled by 96-year-old Li Kashing, one of Asia’s richest people. Hong Kong passed to Chinese sovereignty when Britain’s 99-year lease expired in 1997 after 150 years of British rule.

BlackRock said it briefed Congress and the White House on the deal. In his inaugural address, President Donald Trump said, “China is operating the Panama Canal, and we didn’t give it to China.” Trump has repeatedly threatened to “take back” the canal and accused Panama of violating the terms under which canal ownership was transferred. Panama has insisted that the Chinese government is not involved in canal operations and has denied Trump’s accusation that American ships are given unfair fees.

The BlackRock deal has a second part. CK Hutchinson also agreed to sell controlling interests in 43 ports comprising 199 berths in 23 countries to the investor group. CK Hutchinson will retain ports in Hong Kong and China.

BlackRock completed its purchase of GIP in October of last year.

“This agreement is a powerful illustration of BlackRock and GIP’s combined platform and our ability to deliver differentiated investments for clients,” BlackRock CEO Larry Fink said. “These world-class ports facilitate global growth.”