A group backed by BlackRock and Swiss-Italian shipping firm Mediterranean Shipping Company (MSC) is reportedly pushing to close on CK Hutchison’s international ports business without two Panama Canal terminals that are no longer under the seller’s control.
People familiar with the negotiations say the talks cover the purchase of roughly 41 ports spanning Europe, Southeast Asia and the Middle East. The portfolio being negotiated excludes the two Panama terminals, which national authorities seized after a legal ruling earlier this year.
Panama’s top court determined in January that the concession covering Hutchison’s Panama Canal terminals was unconstitutional, a decision that led authorities to take control of the assets last month. In response, Hutchison’s Panama Ports Company unit has initiated an international arbitration proceeding against the Central American country.
CK Hutchison has been marketing its non-Chinese ports business, a collection that the company says comprises 43 terminals across 23 countries. The two Panama Canal ports were central to the original structure of the $23 billion deal announced last year, under which BlackRock was to assume control of the Panama assets and MSC would acquire the majority of the remaining portfolio.
Sources indicate the potential buyers and CK Hutchison are exploring whether the broader transaction can be completed while excluding the Panama terminals now in state hands. The discussions are taking place against the backdrop of the arbitration action and the unresolved status of the concessions.
The report of the ongoing talks could not be immediately verified, and the firms involved did not provide responses to requests for comment.
Summary
- A BlackRock-backed consortium is seeking to conclude its purchase of CK Hutchison’s ports assets without two Panama terminals that have been seized by authorities.
- Negotiations reportedly involve about 41 ports across Europe, Southeast Asia and the Middle East, out of a non-Chinese portfolio that spans 43 terminals in 23 countries.
- The two Panama Canal ports were a key component of a $23 billion transaction structure announced last year in which BlackRock would have taken the Panama assets and MSC the bulk of the rest.
Key points
- The reported deal talks focus on a large, mostly non-Chinese global ports portfolio and could proceed without the two seized Panama terminals.
- Legal action and a court ruling in Panama have materially altered the status of the Panama concessions, prompting an arbitration filing by Hutchison’s Panama Ports Company.
- Sectors potentially impacted include shipping, global trade logistics and investment management, given the involvement of a major asset manager and a leading shipping company.
Risks and uncertainties
- The outcome of the international arbitration brought by Hutchison’s Panama unit is unresolved and could affect the long-term ownership or compensation for the Panama terminals - impacting legal and political risk for the transaction.
- Continued state control of the Panama assets introduces execution risk for the full portfolio sale, which may require reconfiguration of the original $23 billion structure.
- Until statements are provided by the parties or the legal situation changes, verification of the reported negotiations remains limited.
Promotional note appearing in original report
Should you be buying 0001 right now? ProPicks AI evaluates 0001 alongside thousands of other companies each month using more than 100 financial metrics. The tool uses AI to screen for stock ideas by assessing fundamentals, momentum and valuation, and it cites past winners including Super Micro Computer (+185%) and AppLovin (+157%).