The $22.8 billion CK Hutchison ports deal intensifies geopolitical tensions between the US and China.
Chinese media has already called it 'a betrayal of all Chinese people'.
Shyam G Menon explains how the proposed sale will reshapes global trade infrastructure.
One of the biggest ports deals ever and the responses to it, seem to have captured well the geopolitical tensions and trade wars currently gripping the planet.
On March 4, 2025, CK Hutchison Holdings Limited informed that it had reached an in-principle-agreement to sell 90 per cent of its interests in two Panama Canal terminals and 80 per cent of its ports division -- Hutchison Port Holdings (HPH) -- to BlackRock and Terminal Investment Limited (TiL) for 22.8 billion dollars.
TiL is a subsidiary of the world's biggest container shipping line, Mediterranean Shipping Company (MSC).
The transaction covers 43 container ports in 23 countries and involves 199 berths.
CK Hutchison's press release on the subject (available on its web site), added that the sale does not include stake held in HPH Trust, which operates ports in Hong Kong, Shenzhen and South China or any other ports in China.
Investments thus retained include Hutchison presence at three of the world's top ten container ports, related news reports said.
The deal is so big in terms of geographical sprawl and the potential footprint of the new owners in terminal operations worldwide that observers I spoke to, underscored the importance of seeing the transaction exactly as those involved have termed it: An in-principle-agreement.
A complete picture will be available only after all the related regulatory approvals are also in place, which would take time.
Hong Kong based-billionaire Li Ka-shing, at present senior adviser to CK Hutchison Holdings and the man who promoted the CK Group, was the chairman of CK Hutchison till May 2018.
The sale deal of early March is noteworthy for many reasons. First, the deal includes 90 per cent stake held at two ports -- Balboa and Cristobal -- on the Panama Canal.
US President Donald Trump had recently complained of Chinese presence in activities around the canal.
At the same time, even as Trump's moves overall (mainly his threats to impose tariffs and punitive fees, some of it already in place) have created a flutter in global trade -- particularly on the China-US sector -- most of the Hutchison port investments outside the locations it has decided to retain, are not perceived to be in areas affected by the ongoing geopolitical tensions.
In terms of geographical presence, Hutchison's presence in port operations is strongest in Northern Europe and Southeast Asia.
In C K Hutchison's earlier mentioned press release, Co-Managing Director Frank Sixt said specifically, '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.'
There was no such restraint in President Trump's response. On March 6, Reuters quoted him as telling the US Congress, 'My administration will be reclaiming the Panama Canal, and we've already started doing it.'
He further said, 'Just today, a large American company announced they are buying both ports around the Panama Canal and lots of other things having to do with the Panama Canal and a couple of other canals.'
According to the report, Panamanian President Jose Raul Mulino noted in a post on X: 'The Panama Canal is not in the process of being reclaimed ... the Canal is Panamanian and will continue to be Panamanian!'
For shipping, the Hutchison-BlackRock-TiL deal is a milestone in more ways than one. Hong Kong based-Hutchison is the original international port/terminal operator; it pioneered the business with initial investments in Felixstowe (Hutchison Ports took full control of the Felixstowe port in 1994 -- source: BBC) and Shenzhen.
As of early 2023, placed sixth in the world's top ten list of terminal operators (Singapore's PSA International was the biggest), at one point in time, Hutchison was the biggest international terminal operator worldwide.
It is hard not to view its near total exit from the business of running ports/container terminals -- save the limited operations it has chosen to retain -- without noticing alongside, the backdrop of contemporary geopolitical uncertainties.
Second, the post-COVID period has seen both tremendous growth in the container shipping business as well as consolidation in anticipation of a tighter environment.
The period immediately following the pandemic had seen record profits at major container lines.
Most of these companies were flush with funds. They expanded, buying new and second-hand vessels.
Danish shipping line, Maersk, for long the world's biggest container line, was displaced from the top spot by a rapidly growing MSC.
Around the same time as the sale of Hutchison investment in ports (except for the ones in China) was announced, French shipping major CMA-CGM slipped into the second spot in container line capacity-rankings, pushing Maersk to third.
All these lines and China's mega carrier, COSCO, have international container terminal operations, which rank among the world's top ten in terms of volume handled.
The reading in the trade is that the lines are not done with port investments; there is speculation of the German carrier Hapag Lloyd and Ocean Network Express (ONE) headquartered in Singapore and Japan, seeking to make their plunge into the business.
Owned terminal operations help the lines secure priority and efficiency in how ships are loaded/unloaded and turned around at berth.
Major lines nowadays function with a mix of owned ports and others, the ownership also featuring varying levels of equity exposure.
The sale of the bulk of Hutchison's port business to BlackRock and TiL may at first sight appear to vault the Switzerland-headquartered MSC to the top spot globally in container terminal operations.
Besides through TiL, MSC also has a presence in container terminals by itself. As per data from 2023, Hutchison Ports had a five per cent share in world container port throughput; the same for MSC (including TiL) was 4.9 per cent.
Add the two and the resultant 9.9 per cent is more than the 7.2 per cent share of PSA in 2023.
This is only an indicator of what could be because these volumes will include the terminals Hutchison has kept out of the sale.
That the MSC-TiL-Hutchison combine could vault to the top of the terminal operator league has been reported by multiple publications citing figures from sector consultant, Drewry.
Observers caution a simplistic conclusion about the eventual size of the combine, could be misleading because of a few factors.
First, the post-deal additions to Hutchison volumes (for an estimation of total volumes post-deal) must be done based on equity stakes held by MSC and TiL in their separate port businesses worldwide. The volumes must be considered proportionate to equity exposure.
Second, apart from the headline news, the details of the deal involving BlackRock and TiL were not yet available at the time of writing.
How the BlackRock-TiL Consortium works and how it has shared equity participation in the acquisition, were not revealed in the March 4 statement by CK Hutchison Holdings.
BlackRock is the world's biggest asset management firm (according to Wikipedia, as of 2024, it had 11.5 trillion dollars in assets under management).
Global Infrastructure Partners (GIP), mentioned in the deal as part of the buying consortium, was acquired by BlackRock in 2024.
Third, it is possible that following the deal there could be a phase of rationalization as the new owners select which part of the acquired port network makes sense to be retained and which may perhaps be sold again.
Fourth, PSA, which is the world's biggest international container port operator, had a 20 per cent equity stake (bought in 2006 for 4.4 billion dollars, as per news reports) in Hutchison Port Group.
In July 2023, it was reported that PSA had put its proposed sale of the 20 per cent held in Hutchison's port business, on hold, as offers failed to match the four billion dollars it was expecting as sale price.
At that time, it was reported that China's State-owned business conglomerates -- China Merchants Group (it is present in the list of the world's top ten port/ =terminal operators) and COSCO -- were among firms showing interest in the stake.
Fifth, the TiL Web sit features GIP (owned by BlackRock) in its page listing shareholders. It is thus a tangled picture.
Sixth, given the magnitude of this deal, its full impact will be known only once the whole transaction is completed, any rationalisation of assets to be done by the new owners is executed alongside and all the required regulatory approvals are also in place. Regulators typically grow wary of size beyond a certain threshold.
Tangled picture or not, one thing is however certain -- the deal of early March, if it goes through, makes MSC a veritable giant in container shipping with massive presence offshore and onshore.
MSC, through its subsidiary TiL, has a presence in port operations in India, operating container terminals in Mundra and Ennore, at both places the investments happening in facilities owned by Adani.
More recently, MSC added Adani's Vizhinjam deepwater container transhipment terminal in Kerala, to its Jade service linking Asia to Europe.
Hutchison does not operate any port/ =container terminal in India. According to information available on the company's Web site, the facilities it operates closest to India are in Myanmar and Pakistan.
Some days after the Hutchison deal, news reports on the continuing investments and rearrangements in the global ports sector, said, Hapag Lloyd has acquired a 60 per cent stake in CNMP LH, which operates the Atlantique terminal in Le Havre, France.
Meanwhile, DP World, the Dubai-based international terminal operator (It is among top ten players in the world and has operations in India) is known to be investing around 1.2 billion dollars in its container operations in UK, called London Gateway.
Its plans to increase container handling capacity at London Gateway will take the facility past Felixstowe (currently UK's biggest container port and now a part of the MSC-TiL-Hutchison combine) in five years, media reports said.
On March 14, splash247.com, reported that Beijing's public criticism of CK Hutchison's sale of most of its ports division to MSC and BlackRock had 'brought into question whether the transaction, the largest ports deal in history, will be completed'.
It cited a commentary published in a pro-Beijing publication and later shared in full by Beijing's Hong Kong and Macau office on its Web site.
The report mentioned the commentary saying that CK Hutchison should think twice, which side it wants to stand with.
The commentary is also said to have called the deal, 'a betrayal of all Chinese people'.
Shyam G Menon is a freelance journalist based in Mumbai.
Feature Presentation: Rajesh Alva/Rediff.com
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