A consortium of investors led by BlackRock announced Tuesday that it had agreed to buy a majority stake in the ports on both sides of the Panama Canal from CK Hutchison for $22.8 billion.
Under the deal, the controversial ports on the Panama Canal will be transferred to American companies instead of being managed by Hong Kong-based Hutchison.
Hutchison said in a statement that it had agreed to sell its Panama Canal operations to the US consortium, including a group of non-Chinese ports and a 90% stake in the Panama Ports Company. The announcement comes after years of US pressure.
At the time of the deal, former US President Donald Trump had previously threatened to return control of the Panama Canal to the United States, citing concerns about Chinese dominance of the canal and the treatment of US ships.
Despite these statements, Hutchison stressed that the sale was made as part of a competitive process in which the company received several offers.
“I would like to emphasize that the deal is purely commercial and has nothing to do with any political news reports regarding the Panama ports,” said Frank Sixt, a co-managing director at Hutchison. The response comes amid speculation about the motives behind the deal and its political impact.
U.S. opposition to the current ownership structure is based on concerns that China could use the ports for military purposes, such as monitoring shipping traffic through the strategic canal.
However, Panamanian officials and some former U.S. military officials have said that Chinese facilities in the area have not posed a military threat or undermined the canal’s neutrality.
As part of the deal, the BlackRock-led consortium will buy CK Hutchison’s controlling stake in 43 other ports in 23 countries, further expanding its control over strategic global ports.
Meantime, CK Hutchison stock price rose 21.86% to 47.10 HK.
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