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BlackRock has agreed to purchase two major ports on the Panama Canal from its Hong Kong-based owners as part of a $22.8 billion deal.
Under the agreement, Hong Kong-based owner of the port, CK Hutchison, will sell its operations to consortiums such as BlackRock, Global Infrastructure Partners and Terminal Investment Limited, according to a statement on Tuesday. The group acquires 90% stake in the company that owns and operates two ports in Panama.
Trump frequently claimed that “China operates the Panama Canal,” and rattled Panama when he threatened to “recover it” under American control earlier this year. The Trump administration also called for Panama to reduce China’s influence on the canal, claiming that Beijing’s involvement in the port violated its treaty on neutrality.
The deal, announced Tuesday, also includes an 80% stake in the subsidiary of CK Hutchison Port, which operates 43 ports in 23 countries, including the UK and Germany. It also operates ports in Southeast Asia, the Middle East, Mexico and Australia.
The remaining 20% stake is held by port operator PSA, owned by Singapore Sovereign wealth fund Temasek.
CK Hutchison said it is expected to receive more than $19 billion in cash from the transaction, a figure that includes repayments of shareholder loans. CK Hutchison’s market capitalization is HK 148 billion ($1.9 billion).
The group’s share price surged 22% on Wednesday in morning trading in Hong Kong.
Those who described the debate said that his election victory in November and Trump’s election victory in November and his call to seize control of the canal led CK Hutchison to consider selling, causing a short, intense negotiation period for the port.
“When President Trump won and he began making a fuss about the annexation of Canada, Greenland and Panama, it put pressure on the Panama people,” said one familiar with the deal. The person added that CK Hutchison “recognized it was a political headache and they wanted to do something.”
To navigate potential political fallouts, BlackRock CEO Larry Fink explained to senior Trump administration leaders, including the president, to secure support for the takeover, the two who described the issue. One of the people added that if the US government believed it would not support the deal, the consortium would not have moved forward with the bid.
Managed by Hong Kong’s wealthiest man Li Ka-shing and his family, CK Hutchison has a portfolio of ports, retail, communications and other infrastructure. Port Operations accounted for around 9% of CK Hutchison’s total revenue in 2023.
The canal is the flashpoint for Trump’s first few weeks of office as he seeks to expand the US border and control infrastructure assets.
The BlackRock agreement helped Asset Manager help its infrastructure investments after it acquired GIP.
The strategically important waterways are operated by the Panama Canal Bureau, the Panama Government’s arm. It was built by American engineers and operated by the United States from the opening in 1914 until it agreed to a gradual handover to Panama, which was completed in 1999.
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Hutchisonport, one of the world’s largest container terminal operators, has been managing the port at both ends of the canal since 1997, under concessions from the Panama government.
The facility often attracted political comments from American politicians who argued that CK Hutchison’s role would mean that China would control the canal.
The facility operates primarily as a “transshipment” port, with vessels moving between vessels passing through the canal, with smaller “feeder” vessels returning to and from destinations around the Caribbean and Southern and Central America’s Pacific coast.
CK Hutchison arranged new concessions in 2021 to continue operating the port for another 25 years.
Additional Reports by Robert Wright of London
