A consortium consisting of BlackRock, Global Infrastructure Partners (GIP) and Terminal Investment Limited (TIL) has agreed a $22.8bn (€21.5bn) deal to acquire a select number of ports, including Balboa and Cristobal in Panama, operated by Hutchison Port Holdings (HPH).
The transaction involves Hong Kong conglomerate CK Hutchison entering an agreement to sell HPH’s 90% interests in Panama Ports Company, which owns and operates the Panama ports, and its 80% of subsidiaries managing 43 ports with 199 berths across 23 countries.
The sale – which is subject to conditions – includes all HPH management, operating systems, IT and related assets, the companies said in a joint statement.
The sale does not include any interest in the HPH Trust, which operates ports in Hong Kong, Shenzhen and South China, or any other ports in China.
Frank Sixt, co-managing director at CK Hutchison, said the deal was “the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received” and that the “valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders”.
Sixt said the deal was a purely commercial transaction, “wholly unrelated to recent political news reports concerning the Panama Ports”, alluding to ongoing pressure from US President Donald Trump to end potential Chinese influence over the Panama Canal, a critical global trade route.
After adjusting for minority interests and repayment of certain shareholder loans due from HPH to CK Hutchison, the transaction would be expected to deliver cash proceeds in excess of $19bn to the group, he said.
“It must be noted that, however, the transaction does remain subject to confirmatory due diligence, settlement of definitive documentations, and normal and usual completion procedures, adjustments and conditions as well as compliance by HPH with the rights of minority shareholders under existing shareholders agreements relating to the sold HPH interests.”
Larry Fink, BlackRock chairman and CEO, said: “This agreement is a powerful illustration of BlackRock and GIP’s combined platform and our ability to deliver differentiated investments for clients. These world-class ports facilitate global growth.
“Through our deep connectivity to organisations like Hutchison and [shipping group] MSC/TIL and governments around the world, we are increasingly the first call for partners seeking patient, long-term capital. We are thrilled our clients can participate in this investment.”
Bayo Ogunlesi, CEO and chairman of BlackRock-owned GIP, said: “We are delighted to partner with TIL and MSC, with whom we have a longstanding and productive relationship, to make an offer for certain interests in ports owned and operated by Hutchison Ports Holdings.
“Given GIP’s substantial expertise in owning and operating ports, together with our partners, we can focus on our joint ambition for these assets to continue to be world-class ports operators which are competitive, efficient, commercial and service-focused.”
Diego Aponte, chairman of TIL and president of the MSC Group, said: “Our relationship with Hutchison Ports goes back a long way and is a relationship of mutual respect and friendship. Furthermore, we are very pleased to partner with BlackRock and GIP, with whom we share a longstanding and terrific relationship.
“We have a very high regard toward the Hutchison Ports management team, and if this transaction closes, we look forward to welcoming them into our larger family. We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially.”
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