HUTCHISON TERMINAL SOLD

A consortium led by BlackRock has reached "in principle" agreements to acquire port assets owned by CK Hutchison Holdings Limited at the Panama Canal. Valued at $22.8 billion, the deal includes strategically important port terminals in Panama, which have been at the center of geological tensions.

The transaction involves two key components: Hutchison Port Holdings' (HPH) 90% stake in Panama Ports Company, which operates the Balboa and Cristobal ports at either end of the Panama Canal, and CK Hutchison's 80% controlling interest in companies managing 43 ports with 199 berths across 23 countries. HPH is the port and terminal division of CK Hutchison.

Importantly, the sale does not include any ports in China, nor does it involve HPH Trust operations in Hong Kong, Shenzhen, or South China.

CK Hutchison, a Hong Kong-based conglomerate with no ownership ties to the Chinese government, has managed the Balboa and Cristóbal ports since 1997, with concessions renewed in 2021 for another 25 years.

The controversy surrounding this deal has mainly focused on the two port terminals operated by CK Hutchison. The Panama Canal is managed by the Panama Canal Authority, an independent agency of the Panamanian government responsible for its operations.

Frank Sixt, Co-Managing Director of CK Hutchison, clarified that the transaction is "purely commercial" and is "wholly unrelated to recent political news reports regarding Panama Ports."

After accounting for minority interests and loan repayments, CK Hutchison is expected to receive cash proceeds of over $19 billion from the deal.

BlackRock CEO Larry Fink called the agreement "a powerful illustration of BlackRock and GIP's combined platform," noting that "these world-class ports facilitate global growth."

The consortium includes Global Infrastructure Partners (GIP) and Terminal Investment Limited (TiL). GIP Chairman and CEO Bayo Ogunlesi emphasized the consortium's "substantial expertise in owning and operating ports," expressing their ambition to maintain the ports as "world-class operators."

Terminal Investment Limited, part of the Mediterranean Shipping Company (MSC Group), adds significant maritime experience to the consortium. Diego Aponte, Chairman of TiL and President of MSC Group, expressed confidence in the investment's commercial viability and highlighted their "longstanding and terrific relationship" with BlackRock and GIP.