China Scrutinizes CK Hutchison’s $22.8 Billion Port Sale Plan

China’s top market regulator announced on Friday that it will conduct a review of the proposed sale of Panama port stakes by Hong Kong-listed CK Hutchison Holdings. The deal, which was originally expected to be signed on April 2, has reportedly been postponed, raising questions about its progress.

According to a statement from the State Administration for Market Regulation (SAMR), the anti-monopoly division is aware of the transaction and will evaluate it under the law to ensure fair market competition and protect public interests. The agency did not disclose further details regarding the review process. The division’s official website indicates that it is responsible for overseeing business concentration cases, including guiding enterprises on international antitrust compliance matters.

CK Hutchison Holdings, founded by prominent Hong Kong businessman Li Ka-shing, had announced on March 4 that it had reached an agreement “in principle” to sell a 90 percent stake in its Hutchison Port Group. The buyer consortium is led by U.S. investment firm BlackRock, with the transaction valued at approximately $22.8 billion. Hutchison Port Group operates 43 container ports across 23 countries, including significant holdings in the Balboa and Cristobal ports at both ends of the strategically important Panama Canal.

While the company initially aimed to finalize the deal on April 2, media reports on Friday cited sources indicating that the signing would not proceed as planned. It remains uncertain whether the delay is due to regulatory concerns, modifications to the agreement, or broader geopolitical factors.

Chan Man-chau, president of the Hong Kong Industrial and Commercial Association, expressed support for China’s regulatory scrutiny and urged CK Hutchison to cooperate. “The Panama port occupies a strategic position in international trade and is closely linked to China’s national interests,” Chan stated.

Meanwhile, Hong Kong lawmaker and trade union leader Stanley Ng Chau-pei criticized those who argue that “business is business” in defense of the deal. He emphasized that commercial transactions should not compromise national sovereignty, security, or development priorities.

The Panama Canal, a key artery for global trade, saw an average of 34.2 vessels passing through daily as of December 2024. It remains a lucrative asset, with Forbes estimating that it generated approximately $3.5 billion in net income last year.

CK Hutchison Holdings’ latest annual report, released on March 20, revealed that the company’s net profit fell 27 percent year-on-year to HK$17.09 billion ($2.2 billion) in 2024. However, its ports and related services sector performed strongly, generating HK$45.28 billion in revenue, reflecting an 11 percent increase from the previous year.

The proposed sale has drawn widespread attention, with analysts noting that geopolitical tensions may have played a role in the decision-making process. The United States has increasingly asserted its strategic interests in the Panama Canal, with some political figures advocating for greater U.S. involvement or even military intervention to “reclaim” the waterway.

Source: China Daily Asia