Trump praises 'reclaiming' of Panama Canal following BlackRock-led group's stake acquisition

 The deal with the BlackRock-led consortium includes 90% of Panama Ports Company

U.S. President Donald Trump has praised a deal led by American investment firm BlackRock to acquire most of Hong Kong conglomerate CK Hutchison’s $22.8 billion ports business, which includes key assets along the Panama Canal.

The acquisition grants a U.S. consortium control over crucial Panama Canal ports, aligning with White House efforts to remove them from what it considers Chinese ownership. The high purchase price sent CK Hutchison’s stock surging over 20%.

“My administration will be reclaiming the Panama Canal, and we’ve already started,” Trump told Congress. “Today, a major American company announced they are buying both ports around the Panama Canal, along with other assets tied to the canal and a few others.”

CK Hutchison confirmed the deal includes a 90% stake in Panama Ports Company, which has operated the Balboa and Cristobal ports at either end of the canal for more than two decades. The BlackRock-led consortium—comprising Terminal Investment and Global Infrastructure Partners—will gain control of 43 ports across 23 countries, encompassing 199 berths.

CK Hutchison's stock closed up 21.9% on Wednesday, outperforming the broader Hang Seng Index, which rose 2.8%. The company's share price is now at its highest since August 1, 2023.

The sale involves CK Hutchison’s 80% stake in Hutchison Ports, valued at $14.21 billion in equity. However, following shareholder loan repayments, the conglomerate is expected to receive over $19 billion. Goldman Sachs is advising CK Hutchison on the deal, though the bank declined to comment.

Hutchison Ports’ remaining stake is owned by Singapore’s PSA International.

The Panama Canal remains a vital global trade artery, with around 12,000 ships passing through annually, connecting 1,920 ports in 170 countries. More than three-quarters of the vessels originate from or are destined for the United States, reinforcing its strategic significance.

CK Hutchison co-managing director Frank Sixt clarified that the transaction was purely commercial and unrelated to political discussions about Panama Ports. The company had been awaiting a ruling from Panama’s Supreme Court on the legality of its government contract, which had been challenged as "unconstitutional" by the country's attorney general.

RAPID, COMPETITIVE PROCESS

CK Hutchison, the global conglomerate controlled by billionaire tycoon Li Ka-shing, spans industries from infrastructure and retail to telecommunications, in addition to being the world’s largest privately owned port operator.

Since the 1980s, Li has been diversifying beyond Hong Kong and mainland China. Today, only about 12% of CK Hutchison’s revenue comes from these regions, with the bulk generated in Europe, the rest of the Asia-Pacific, and Canada.

Co-managing director Frank Sixt described the ports deal as the outcome of “a rapid, discrete, but competitive process,” attracting multiple bids and expressions of interest.

JPMorgan noted that while the sale of the Panama business is “understandable,” it comes as a “surprise” since most of CK Hutchison’s ports are not in regions directly affected by Sino-U.S. geopolitical tensions. The bank suggested it might be “an opportunistic deal,” stating that CK Hutchison’s approach is to sell assets if “the price is right.”

The deal marks a strategic shift for CK Hutchison, significantly reducing ports’ contribution to its earnings before interest, tax, depreciation, and amortization (EBITDA) from 15% to just 1%. Meanwhile, infrastructure—the conglomerate’s largest segment—will increase its share from 28% to 33%.

The $19 billion CK Hutchison is set to receive from the sale far exceeds analysts’ $13 billion valuation of the ports assets. Citigroup analysts described the disposal as “significantly value-enhancing.”

UBS analysts noted that as of June, CK Hutchison had a net debt of HK$138 billion ($17.76 billion), and the sale proceeds could put the company into a net cash position.