Hutchison sells Panama Canal Ports To A U.S. Led Consortium Under Pressure From The U.S.

CK Hutchison Holdings sold its controlling interest in two major Panama Canal ports to a U.S. led consortium for $22.8billion. BlackRock Inc. Global Infrastructure Partners and Terminal Investment Limited will receive a 90% stake of the Panama Ports Company that operates the Balboa & Cristobal Ports.

The sale comes after President Donald Trump expressed concerns about China's influence on key infrastructure in the canal. Trump publicly criticized a Hong Kong based company's control over these ports, saying it was a threat to the national security of the United States.

About 6% of all global trade is handled by the Panama Canal, and two-thirds are linked to U.S. port. Control of the Balboa & Cristobal ports will secure American trade routes and streamline operations. It will also reduce risks associated with foreign control.

The acquisition is viewed as a means to protect against potential espionage and disruptions of maritime traffic. The U.S. Department of Defense expressed concerns in the past about foreign-operated port at the canal. This was done to emphasize the strategic importance of this region.

Deal also offers trade benefits. New ownership will increase port infrastructure investments and improve efficiency. This could reduce shipping costs and transit time. Larry Fink of BlackRock stated that their goal was to improve the efficiency of the global trade routes through the canal.

Panama's government has supported the deal, as it balances its economic relationship with China with its strategic relationship with America. The President of Panama, Jose Raul Mulino, said that the transaction aligns with Panama’s goal to maintain the canal's impartiality while ensuring continued trade volume growth.