Rumors from China report that tycoon Li Ka-shing has decided not to sign the deal worth over $20 billion on April 2
China’s State Administration for Market Regulation to review the deal
Beijing trying to project strong stance against US, analysts say
For the time being, the transfer of Hutchison’s container terminals (including those overlooking the Panama Canal) to the consortium of investors composed of BlackRock and also MSC is not to be done.
Not to sign the agreement
According to the South China Morning Post, Hong Kong conglomerate CK Hutchison, led by tycoon Li Ka-shing, has decided not to sign the agreement on its two strategic ports at the Panama Canal on April 2 (as originally planned). This does not mean, however, that the agreement has been cancelled.
Carry out an antitrust review
China’s market regulator said it will carry out an antitrust review on the Panama port deal in accordance with a law to protect fair competition and safeguard the public interest, its official WeChat account showed late on Friday.
Sell most of the global ports business
It is noteworthy that the telecoSms-to-retail conglomerate owned by tycoon Li Ka-shing this month agreed to sell most of the global $22.8 billion ports business, including assets it holds along the strategically important Panama Canal, to a group led by BlackRock (BLK.N)
Definitive documentation for the two port operations near the Panama Canal was expected to be signed by April 2, according to the sale announcement made on March 4.
The development does not mean the deal
The development does not mean the deal has been called off, and April 2 is not a hard deadline. The second source, who also declined to be identified for similar reasons, said talks are still very much underway.Negotiation for the overall deal that covers a total of 43 ports in 23 countries is on an exclusive basis between CK Hutchison and the consortium for 145 days.
Acquisition of Hutchison Terminals
The March 4 sales announcement states that BlackRock, its new infrastructure arm Global Infrastructure Partners (GIP) and Geneva-based Terminal Investment have agreed to acquire a 90% stake in Panama Ports.Earlier this month, CK Hutchison agreed to divest the majority of its global ports business, which includes port assets located at both entrances to the Panama Canal.
Xi Jinping to be upset about the deal
Chinese leader Xi Jinping is said to be upset about the deal because CK Hutchison did not seek Beijing’s approval in advance, the Wall Street Journal reported last week, and he plans to use the ports issue as a bargaining chip in negotiations with the Trump administration
US : CCP is upset at this acquisition
We are aware of the comments made by China,” U.S. State Department spokesperson Tammy Bruce told a news briefing on Friday when asked about the Chinese regulator’s review. “It’s also no surprise that the CCP (Chinese Communist Party) is upset at this acquisition, which will reduce their control over the Panama Canal area.”
After Trump’s threats :BlackRock to buy Panama Canal ports
The sale and purchase operation
On the other hand the sale and purchase operation is expected to involve 90% of Hutchison’s capital in Panama Ports Company (which operates the two aforementioned Central American terminals) and 80% of CK Hutchison which owns, operates and develops 43 terminals comprising 199 berths in 23 countries. Excluded from the operation is the Hph Trust, which operates terminals in Hong Kong, Shenzhen and southern China, and any other ports in China.
The total enterprise value for 100% of Hutchison Port Holding’s ports sales perimeter, including the Panama ports, was agreed at $22.8 billion.
