A Hong Kong-based conglomerate has reached an agreement to sell its majority shares in a subsidiary managing ports near the Panama Canal to a consortium that includes BlackRock Inc. This move effectively places control of these strategic ports under American oversight, following President Donald Trump’s accusations of Chinese involvement in operations around this vital shipping passage.
In a recent announcement, CK Hutchison Holding revealed it would divest all its shares in both Hutchison Port Holdings and Hutchison Port Group Holdings to the consortium, with the transaction valued at nearly $23 billion, which also comprises $5 billion in debt.
This deal grants the BlackRock consortium authority over 43 ports across 23 nations, notably the Balboa and Cristobal ports, which are located at each end of the Panama Canal. Additional ports are situated in Mexico, the Netherlands, Egypt, Australia, Pakistan, among other locations.
Though this transaction requires approval from Panama’s government, it excludes interests in ports based in Hong Kong, Shenzhen, South China, or any other Chinese ports.
Approximately 70% of the ships navigating through the Panama Canal are destined for or coming from U.S. ports. The United States originally constructed the canal in the early 20th century to streamline commercial and military vessel transit between its coasts. However, under a treaty signed by President Jimmy Carter in 1977, the United States handed control of the canal to Panama on December 31, 1999. Trump criticized Carter for what he termed the “foolish” decision to relinquish control.
Trump’s circle and supporters have also expressed discontent about the tolls imposed on vessels utilizing the canal, asserting that China is in control, although Panama’s government has denied this claim.
Earlier this year, U.S. Senator Ted Cruz, leading the Senate Committee on Commerce, Science and Transportation, expressed unease over potential exploitation or obstruction of passage by China and warned that the ports offered China strategic surveillance capabilities, posing significant national security concerns for the U.S.
During a visit to Panama in February, U.S. Secretary of State Marco Rubio encouraged President José Raúl Mulino to diminish Chinese influence on the canal under threat of facing repercussions from the U.S. However, Mulino dismissed the notion of Chinese control over canal operations.
In the aftermath of Rubio’s visit, Panama exited China’s Belt and Road Initiative, triggering criticism from Beijing. The Belt and Road Initiative is China’s global strategy aimed at developing infrastructure such as roads, ports, and railways to expand market access.
As attention was directed at Trump’s ambition to regain control over the canal, his administration’s focus shifted to Hutchison Ports, the Hong Kong consortium managing essential ports at the canal’s endpoints.
While Hutchison Ports had recently secured a no-bid 25-year extension to operate the ports, an audit was already in progress, prefacing a potential rebidding of the contract. Speculation had emerged that a U.S.-aligned firm was being situated to assume control.
Frank Sixt, co-managing director of CK Hutchison, noted that the sale emerged from a swift, discreet competitive process that attracted numerous bids and expressions of interest.
He emphasized the commercial nature of the transaction and distanced it from recent political narratives involving Panama Ports.
Aside from BlackRock, a New York-based global investment management firm managing $11.6 trillion in assets as of the end of last year, the consortium includes Global Infrastructure Partners, a BlackRock subsidiary, and Terminal Investment Limited.
Despite not offering further comments beyond a press release highlighting the deal, BlackRock’s shares dipped by 1.5% during Tuesday’s afternoon trading.
