A conglomerate based in Hong Kong, which operates ports close to the Panama Canal, has reached an agreement to sell its shares in port-operating units to a consortium that includes BlackRock Inc. This decision comes in the wake of allegations made by President Donald Trump regarding Chinese interference in the operations of this critical shipping route.
In a recent filing, CK Hutchison Holding announced that it will divest all shares of Hutchison Port Holdings and Hutchison Port Group Holdings. These subsidiaries together account for 80% of the Hutchison Ports group, which runs 43 ports across 23 countries, including two of the four major ports along the Panama Canal. The arrangement will grant the BlackRock consortium control over these ports, spanning nations such as Mexico, the Netherlands, Egypt, Australia, Pakistan, and more.
The consortium, which includes BlackRock, Global Infrastructure Partners, and Terminal Investment Limited, is set to acquire a 90% stake in Panama Ports Company, responsible for operating the ports of Balboa and Cristobal in Panama. These are among the four major ports situated along the Panama Canal.
“This agreement showcases the strength of the combined platform of BlackRock and GIP, reflecting our capacity to provide distinctive investments for our clients. These world-class ports play a crucial role in fostering global growth,” stated BlackRock CEO Larry Fink during a joint announcement with TilL concerning the deal. “Our extensive connections with organizations such as Hutchison and MSC/TIL, along with governments worldwide, position us as the preferred choice for partners seeking long-term, patient capital. We are excited that our clients can be part of this investment.”
In January, U.S. Senator Ted Cruz, chair of the Senate Committee on Commerce, Science and Transportation, expressed concerns that China could take advantage of or obstruct passage through the canal, arguing that these ports provide China with strategic observation posts. “This situation poses significant risks for U.S. national security,” Cruz asserted.
U.S. Secretary of State Marco Rubio made a visit to Panama in early February, conveying to President José Raúl Mulino the necessity of diminishing Chinese influence over the canal, lest Panama face potential repercussions from the United States. Mulino dismissed the notion that China held any sway over canal operations.
Following Rubio’s visit, Panama withdrew from China’s Belt and Road Initiative, leading to backlash from Beijing.
Trump’s Triumph
The Panama Canal, a 51-mile waterway traversing Central America and connecting the Atlantic and Pacific Oceans, sees 40 million container ships passing through annually, making it crucial to the U.S. economy. Tensions over the canal first arose in 2024 when Trump, then a presidential candidate, accused Chinese firms of seizing control of the ports.
While much focus rested on Trump’s threat to reclaim control of the canal, his administration also directed attention toward Hutchison Ports, the Hong Kong-based consortium managing the pivotal ports at both ends of the canal. With BlackRock’s agreement with CK Hutchison Holding, these significant ports will now fall under American control.
The United States plays a dominant role as the canal’s largest user, with approximately 70% of shipping traffic through the canal either originating from or destined for the U.S., while China is the second largest user.
Recently, Hutchison Ports had received a 25-year no-bid extension to operate the ports, although an audit of that extension was already in progress. Observers viewed this audit as an initial move towards the potential rebidding of the contract, and rumors had circulated in recent weeks suggesting that a U.S. firm closely linked to the White House was being prepared to step in and take over.
