Hong Kong's CK Hutchison will not finalize a deal next week to sell its two port operations near a BlackRock-led group, as pressure from Beijing increases. China's market regulator announced it would conduct an antitrust review aimed at protecting fair competition and safeguarding the public interest.
The telecoms-to-retail conglomerate, owned by tycoon Li Ka-shing, recently announced plans to sell its global $22.8 billion ports business, which includes strategically important assets. Definitive documentation for the two port operations near the Panama Canal was initially expected to be signed by April 2, according to the sale announcement made on March 4.
One source, who wished to remain anonymous due to the sensitive nature of the matter, indicated that the documentation would not be signed, citing "obvious reasons." However, the individual clarified that this does not mean the deal is off, and noted that April 2 is not a strict deadline. Another source confirmed that discussions are ongoing.
Negotiations for the comprehensive deal, covering a total of 43 ports across 23 countries, are exclusively between CK Hutchison and the consortium for 145 days. Local media reports have highlighted this development.
CK Hutchison has not provided immediate comments. The conglomerate is facing increasing scrutiny from Chinese authorities regarding its plans to divest port assets, a deal which could yield over $19 billion. The deal has drawn attention from U.S. President Donald Trump, who expressed interest in regaining control over the strategic waterway.
U.S. State Department spokesperson Tammy Bruce acknowledged China's criticisms during a press briefing, noting it's unsurprising that the Chinese Communist Party is opposed to an acquisition that would diminish their influence in the Panama Canal area.
In the past two weeks, pro-Beijing Hong Kong newspaper Ta Kung Pao has published commentaries condemning the deal, framing it as a betrayal of China. Additionally, the Hong Kong and Macau Affairs Office has shared these critiques on its website, leading to speculation that Beijing may act to obstruct the sale.
A CK Hutchison subsidiary operates two ports, which manage approximately 3% of global sea-borne trade. Panama first granted the concession to the company in 1998 and extended it for another 25 years in 2021. Panama's Comptroller General has stated that an audit of the concessions will be ready in the coming days or weeks.
Analysts suggest that Beijing's criticism of CK Hutchison's divestment is indicative of increased political scrutiny on major Chinese business sales involving American buyers. Earlier in the week, it was reported that Chinese authorities had advised state-owned firms to avoid new deals with businesses associated with Li Ka-shing and his family.