An investment consortium led by BlackRock, the world’s largest asset manager, has agreed to acquire two strategically positioned ports at either end of the Panama Canal from Hong Kong-based CK Hutchison.
The deal, valued at approximately $19 billion, includes the ports of Balboa and Cristobal, as well as over 40 other ports in 23 countries.
The transaction comes amid heightened geopolitical concerns over China’s role in global trade and allegations from President Donald Trump that Beijing has undue influence over the vital shipping route.
However, the deal must still receive approval from Panama’s government before moving forward.
What does the deal entail?
Under the terms of the deal, BlackRock’s consortium will take control of 43 ports, including key facilities in Mexico, the Netherlands, Egypt, Australia, and Pakistan.
Notably, the acquisition does not include any interests in CK Hutchison’s port operations in Hong Kong, Shenzhen, or other parts of China.
“These world-class ports facilitate global growth,” BlackRock CEO Larry Fink said in a statement.
“Through our deep connectivity to organizations like Hutchison and governments around the world, we are increasingly the first call for partners seeking patient, long-term capital.”
What are Trump’s claims about Chinese influence on the canal?
The Panama Canal, a key transit route for global trade, was originally constructed by the US in the early 20th century and was handed over to Panama in 1999 under a treaty signed by President Jimmy Carter in 1977.
BlackRock’s acquisition follows a series of statements from Trump and his allies, who have expressed concern over CK Hutchison’s presence in Panama.
The president has repeatedly claimed, without evidence, that China controls the canal and has suggested that the US should retake control of the waterway.
“China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump said in his inaugural address.
In January, he further suggested that military force or economic pressure could be used to regain influence over the canal.
Although Trump’s assertion about China’s control of the canal is unproven, growing Chinese influence in global shipping and port infrastructure has raised concerns among US officials, who worry that the Chinese government could pressure private companies to disrupt commercial and military shipments during a conflict.
Observers believe the sale to BlackRock could help alleviate concerns within the US government about Chinese influence in the region.
CK Hutchison says transaction purely commercial
CK Hutchison, which has operated the Balboa and Cristobal ports for decades, emphasized that the sale was purely a commercial decision.
Co-Managing Director Frank Sixt stated that the company had received multiple bids and ultimately chose BlackRock’s offer through a competitive process.
“I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama ports,” Sixt said.
Curiously, the sale follows Panama’s recent decision to extend Hutchison Ports’ contract by 25 years without a competitive bidding process.
However, an audit was already underway to evaluate the extension, prompting speculation that a US-aligned firm might take over operations.
According to AP, observers believed the audit was a preliminary step toward eventually rebidding the contract, but rumours had swirled in recent weeks that a US firm close to the White House was being lined up to take over.
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