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Investing.com -- CK Hutchison Holdings Ltd., a Hong Kong-based conglomerate, has agreed to sell control of a unit that operates ports near the Panama Canal and other international ports to a consortium. This move comes after US President Donald Trump urged a reduction of Chinese interests in the region.
The consortium consists of BlackRock Inc (BVMF:BLAK34)., Global Infrastructure Partners, and Terminal Investment Limited (the “BlackRock-TiL Consortium”). The agreement in principle will see the consortium acquire 90% interests in Panama Ports Company (PPC) and 80% effective and controlling interest in subsidiary and associated companies.
The PPC, which operates the ports of Balboa and Cristobal in Panama, will proceed separately on confirmation by the Government of Panama of the proposed terms of the purchase and sale. The subsidiary and associated companies, owning, operating and developing a total of 43 ports comprising 199 berths in 23 countries, will proceed on an expedited basis, subject to the consortium conducting normal and usual confirmatory due diligence, settlement of definitive documentation, and receipt of any necessary regulatory approvals.
The agreement does not include any interest in the HPH Trust, which operates ports in Hong Kong, Shenzhen, South China, or any other ports in China. The total enterprise value for 100% of the ports, including the Panama Ports, has been agreed at US$22.8 billion. The allocation of transaction proceeds between the PPC transaction and the subsidiary and associated companies transaction has also been agreed in principle.
The definitive documentation for the PPC transaction is expected to be signed on or before April 2, 2025. CK Hutchison and HPH have entered into exclusive negotiation and non-disclosure arrangements with the BlackRock-TiL Consortium, which will be given full access to information and documentation for purposes of conducting confirmatory due diligence.
Larry Fink, Chairman and Chief Executive Officer of BlackRock, said: “This agreement is a powerful illustration of BlackRock and GIP’s combined platform and our ability to deliver differentiated investments for clients. These world-class ports facilitate global growth. Through our deep connectivity to organizations like Hutchison and MSC/TIL and governments around the world, we are increasingly the first call for partners seeking patient, long-term capital. We are thrilled our clients can participate in this investment.”
Bayo Ogunlesi, GIP Chairman and Chief Executive Officer, said: “We are delighted to partner with Terminal Investment Limited and MSC, with whom we have a longstanding and productive relationship, to make an offer for certain interests in ports owned and operated by Hutchison Ports Holdings. Given GIP’s substantial expertise in owning and operating ports, together with our partners, we can focus on our joint ambition for these assets to continue to be world-class ports operators which are competitive, efficient, commercial and service-focused.”
Diego Aponte, Chairman of TiL and President of the MSC Group, said: “Our relationship with Hutchison Ports goes back a long way and is a relationship of mutual respect and friendship. Furthermore, we are very pleased to partner with BlackRock and Global Infrastructure Partners (GIP), with whom we share a longstanding and terrific relationship. 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. We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially.”
Frank Sixt, Co-Managing Director of CK Hutchison, said: “This Transaction (JO:TCPJ) is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received. As a result, the Transaction valuation agreed in principle is compelling, and the Transaction is clearly in the best interest of our shareholders. After adjusting for minority interests and repayment of certain shareholder loans due from HPH to CK Hutchison, the Transaction would be expected to deliver cash proceeds in excess of US$19 billion to our Group. 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."
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