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Investing.com-- Chinese authorities are scrutinizing a recent deal by Hong Kong conglomerate CK Hutchison Holdings Ltd (HK:0001) to sell its overseas port business to a consortium led by BlackRock Inc (NYSE:BLK), Bloomberg reported on Tuesday, with Beijing unhappy over the divestiture of holdings in Panama.
Several Chinese agencies, including the State Administration of Market Regulation, have been instructed to study the deal for potential security breaches and antitrust violations, the Bloomberg report said, citing people with knowledge of the matter.
CK Hutchison had sold holdings in about 43 ports- including key locations along the Panama Canal- to a consortium led by BlackRock for about $19 billion. U.S. President Donald Trump claimed that the deal saw the U.S. reclaiming the Panama Canal.
Beijing’s scrutiny of the deal does not guarantee that any action will be taken, the Bloomberg report said.
The deal gave CK Hutchison an exit from an increasingly politicized space, especially as relations between the U.S. and China sour further under Trump. But the deal had also drawn criticism from several Chinese and Hong Kong officials, who saw the deal as caving to U.S. political pressure.
Trump had raised concerns over one of the world’s busiest shipping lanes- which was built by the U.S.- being controlled by foreign entities, particularly China.
Chinese regulatory scrutiny could potentially disrupt the deal, especially if authorities pressure CK Hutchison to walk back on its sale. But the sale is not subject to Chinese regulatory approval, given that the buyers and the assets in question are entirely foreign.
Chinese media reports showed growing ire among mainland and Hong Kong officials over the sale, with several officials and political commentators writing scathing critiques in local media.
Pro-Beijing publication Ta Kung Pao called the deal a “betrayal of all Chinese people” in a critique published last week.