China’s COSCO Shipping in Talks to Invest in CK Hutchison’s Terminal Operations Deal

A recent report has revealed that China’s COSCO Shipping is currently in negotiations to become an investor in the acquisition of CK Hutchison’s terminal operations. According to Bloomberg, a group of Chinese investors is discussing potential involvement with MSC’s Terminal Investments and BlackRock in the $23 billion deal, which encompasses terminal operations in 41 ports globally.

The deal has faced strong opposition from China, particularly regarding the sale of terminal operations at both ends of the Panama Canal. Billionaire Li Ka-shing, who owns CK Hutchison, has historically clashed with the Chinese government, leading to concerns over the sale’s implications for Chinese trade. China perceives the agreement with BlackRock as a move to appease US President Donald Trump’s claims about Chinese influence over the Panama Canal.

The consolidation of terminal ownership in the deal has raised alarms in the shipping industry, with concerns about MSC’s increasing dominance. Panama officials have expressed worries about the potential impact on the neutrality of Panama’s operations. Industry analyst Drewry has also highlighted TIL’s emergence as a significant player in port operations, operating over 70 terminals globally and handling millions of containers annually.

In early March, CK Hutchison announced exclusive negotiations with BlackRock for the sale of its global port portfolio, excluding Hong Kong and mainland China. The deal entails the transfer of 80% ownership of 43 ports and 90% ownership of Panama Ports Company, which oversees terminals in Balboa and Cristobal, Panama. TIL is reportedly in talks to acquire a majority stake in the international portfolio, with BlackRock and CK Hutchison holding smaller shares.

China has stated its intention to review the deal for compliance, despite lacking an official oversight role. The potential involvement of COSCO and other Chinese firms in the investment could be viewed as a diplomatic gesture. COSCO Shipping Ports, a subsidiary of COSCO, manages hundreds of berths globally, making it a strategic candidate for leading the Chinese stake in the deal.

With the exclusive agreement between Hutchison and the BlackRock/TIL group set to expire in late July, the parties may choose to extend negotiations or entertain alternate bids. The target deadline for finalizing agreements is April 2, indicating a critical period ahead for the deal’s progression.