American, European Investors to Take Over Chinese Company's Stake in Panama Canal Ports
New York-based BlackRock and an Italian maritime company are buying the vast majority of a Chinese company’s Panama Canal ports, further distancing the canal from China’s influence, following threats from President Donald Trump to retake control of the waterway if U.S. interests were threatened.
CK Hutchison Holding, a Hong Kong-based company, has controlled two key ports on the Atlantic and Pacific sides of the canal since 1997, before China took control of the once highly capitalist island off of its coast. Though it operated the ports without incident for decades, Trump and China hawks in Washington have suggested in recent years that China’s influence over Panama was becoming problematic.
Panama, for example, signed on to China’s Belt and Roads Initiative, an economic development program under which China has provided financing for infrastructure projects worldwide. Panama also in 2017 cut ties with Taiwan, a policy favored by the Chinese government.
Since Trump’s election and tough talk on Panama, the Central American nation has distanced itself from China, vowing to audit the CK Hutchison contracts. In a video interview last month, Panama Canal Expert Andrew R. Thomas predicted that Panama would push the ports operator to divest its holdings in favor of U.S. ownership.
Full Conversation with Andrew R. Thomas About the Future of the Panama Canal
In its press release, CK Hutchison officials denied that global politics were at play.
“This Transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received,” CK Hutchison Co-Managing Director Frank Sixt said. “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.”
BlackRock and its partners will pay $22.8 billion for CK Hutchison’s port operations in Balboa and Cristobal in Panama. The deal must clear regulatory processes in Panama. BlackRock’s primary partner is Terminals Investment Ltd., an Italian company owned by billionaire Ganluigi Aponte and his family.
Diego Aponte, chairman of TiL, said, “We have a very high regard toward the Hutchison Ports management team, and if this transaction closes, we look forward to welcoming them into our larger family.”
