U.S. investment firm BlackRock has reached an “in principle” agreement with Hong Kong based CK Hutchison to buy two major Panama Canal ports. It will acquire a 90% stake of Panama Ports Company (PPC), which owns and operates the Ports of Balboa and Cristobal at both entrances of the Panama Canal. The consortium consists of US investment firm BlackRock and Terminal Investment Limited (Til), owned by Swiss MSC.
Tuesday’s $22.8bn deal also includes a 80% stake in CK Hutchison’s global port network with 43 ports in 23 countries. This includes ports in Australia, Netherlands (Rotterdam), Spain, Mexico, South Korea and the Middle East, among others. The remaining 20% of Hutchison Ports is owned by Singapore’s PSA International.
Political Pressure from Trump
The agreement follows on political pressure and complaints by US President Donald Trump. Since last December Trump has frequently alleged that China has too much influence over the Canal and has threatened to take back control. American officials have stated that Hong-Kong based CK Hutchison’s control of the ports represents a security risk for the operation of the Canal. The current deal gives the U.S firm BlackRock control of key ports at both entrances of the Panama Canal. The other main ports in Panama are operated by companies from the U.S., Taiwan and Singapore.
On behalf of CK Hutchison, Co-Managing Director Mr. Frank Sixt said he expected cash proceeds of more than 19 billion USD from the deal after adjustments and repayment of certain shareholder loans. He also stated that “the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports”.
– UPDATE 2 April 2025
Meanwhile Chinese authorities have reacted negatively to the plans, while U.S. President Donald Trump celebrated the deal.
On March 28 China’s market regulator announced it will carry out an antitrust review into the deal and it is currently unclear what the effect of this will be on the deal, that was planned to be signed today. TBC…
The Panama Canal is key to global trade as around 5% of the world’s maritime trade transits the Canal. The United States is the largest customer of the Panama Canal with 75% by origin and destination of cargo in 2024.
Legal Challenges
In early February, two Panamanian lawyers filed a petition with the country’s Supreme Court, seeking to annul the concessions on the grounds of unconstitutionality.
On 19 February Panama’s attorney general sent his opinion to Panama’s Supreme Court concluding that CK Hutchison’s port contract was “unconstitutional.” The Supreme Court in Panama still has to make the final ruling on its legal status.
The contract was viewed as improperly transferring the rights of the Panamanian state, impacting public welfare and interests, and hindering free competition and market demand.
In addition, Panamanian authoritities launched a financial audit of Panama Ports in January of this year. The government has stated that the audit will continue while the acquisition process moves forward.
About Panama Ports Company: Balboa & Cristobal
Hutchison’s PPC was originally granted a 25-year concession in 1997, which was later extended for another 25 years in 2021. The concession includes two major ports at both entrances of the Panama Canal.
The Port of Balboa, at the Pacific entrance, is the 2nd largest port in the Panama Canal in terms of container movements with 2.63 million TEU (20 foot container equivalent) in 2024 (+13% compared to 2023).
With five docks for container ships, Balboa operates with 25 gantry cranes (10 Post Panamax, 8 Panamax and 7 Super Post Panamax), and has an annual capacity of five million TEU.
The Port of Cristóbal, at the Atlantic entrance, is the 5th largest port, with 1.1 million TEU in 2024 (+24% compared to 2023). It currently has three container docks and 12 hectares dedicated to the handling and storage of containers respectively, and 13 gantry cranes. It has the capacity to handle two million TEU per year.