BlackRock-Led Consortium Acquires Panama Canal Ports For $22.8 Billion

An investor group led by BlackRock has won a major deal to acquire two critical ports near the Panama Canal, which was previously controlled by Hong Kong’s CK Hutchison Holdings.

The $22.8 billion transaction comes after increasing pressure from former U.S. President Donald Trump, about China’s influence over key infrastructure in the region.

BlackRock, along with its partners Global Infrastructure Partners and Terminal Investment Ltd, will take a 90% stake in the Panama Ports Company, which operates the Balboa and Cristobal ports at either end of the canal.

The deal also includes the acquisition of more than 40 other ports globally from CK Hutchison.

Trump had claimed, without evidence, that China controlled the Panama Canal. His administration also criticised the fees charged for canal transit, arguing they were excessive.

After tensions escalated, the deal between BlackRock and CK Hutchison emerged as a resolution to ease pressure on Panama.

Political analysts believe the sale provides a diplomatic solution to what seemed like a growing crisis. Benjamin Gedan, director of the Latin American program at the Wilson Center, described it as “an elegant off-ramp” to a problem that had no clear resolution.

Peter James Hudson, an associate professor at the University of British Columbia, pointed out that Panamanian voices have been largely absent from the conversation,

Panama’s President Jose Raul Mulino called the deal a private transaction of business interests. The Panamanian government has committed to auditing CK Hutchison to verify its financial contributions to the state.

Nearly a dozen auditors have already begun reviewing the company’s records. The deal will help Panama balance its economic ties with China while maintaining its partnership with the U.S.

Since approximately 6% of global trade passes through the Panama Canal, with two-thirds of it linked to U.S ports, American control over Balboa and Cristobal secures vital trade routes.

This is the largest infrastructure deal to date for BlackRock. The company is using Global Infrastructure Partners (GIP), an investment firm it acquired last year for $13 billion, to expand its reach beyond traditional asset management.

The deal was facilitated through discussions between executives from BlackRock and the Trump administration, including BlackRock CEO Laurence D. Fink, Treasury Secretary Scott Bessent, and Secretary of State Marco Rubio.

CK Hutchison’s leadership, including co-managing director Frank Sixt, insisted that the sale was purely commercial and not related to political developments. The acquisition is expected to enhance port infrastructure, streamline operations, and improve trade efficiency.

The new ownership is expected to reduce shipping costs and transit times while ensuring greater security against espionage or disruptions in maritime traffic.

References: Reuters, NYTimes

Source: Maritime Shipping News