China to review BlackRock’s deal to buy Panama Canal ports

​China's antitrust authority, the State Administration for Market Regulation (SAMR), has announced plans to scrutinize the proposed sale of two Panama Canal ports by Hong Kong's CK Hutchison to a consortium led by BlackRock. This development introduces further uncertainty to a transaction already under geopolitical scrutiny.​

The sale is part of a broader $22.8 billion agreement involving 43 ports worldwide. Chinese officials have previously cautioned CK Hutchison against proceeding with the deal, especially given the involvement of U.S. investors like BlackRock and Global Infrastructure Partners.​

On Friday, SAMR stated on its website that it is aware of the transaction and intends to "review it in accordance with the law to protect fair competition in the market and safeguard the public interest." This statement was issued in response to inquiries from Ta Kung Pao, a Beijing-backed newspaper in Hong Kong, and attributed to an official in SAMR's anti-monopoly division.​

Earlier this month, Ta Kung Pao criticized the sale, describing it as a "spineless, grovelling" action that "sells out all Chinese people."​

It remains unclear whether SAMR's review will encompass the entire global deal or focus solely on the Panama ports. According to sources familiar with the matter, the Panama ports represent a minor portion of the overall deal, which also includes assets in Europe, Southeast Asia, and the Middle East.​

Since last week, SAMR has been gathering information and preparing to initiate the investigation. The regulator is assessing whether the sale violates regulations or restricts competition in China's domestic shipping and international cargo trade markets.​

Industry experts have been consulted by SAMR regarding the case. Recommendations include imposing conditions on the BlackRock-led consortium to ensure that the deal does not diminish the competitiveness of Chinese shipping companies and cargo owners.​

The agreement was initially announced in early March, with a formal signing anticipated by April 2. However, this timeline is now expected to be delayed due to the ongoing review.​

Negotiations between CK Hutchison and the BlackRock-led group are ongoing, with both parties preparing for a potential SAMR review.​

CK Hutchison, controlled by Hong Kong billionaire Li Ka-shing and his family, finds itself navigating tensions between Beijing and Washington over the Panama ports. U.S. President Donald Trump has expressed concerns about Chinese influence over the canal and indicated intentions for the U.S. to "take it back."​

It is uncommon for a Chinese state agency to review a deal involving a Hong Kong-based company. CK Hutchison is incorporated in the Cayman Islands, and its Chinese port assets are not included in the sale.​ Financial Times

A source familiar with the deal questioned whether this move serves as a warning to others or an attempt to derail the transaction. They noted that, on paper, SAMR's review under its anti-monopoly mandate appears logical, but speculated whether the underlying motive is to undermine the deal, which could have broader implications for Hong Kong as a financial center.​

Josh Lipsky, senior director at the Atlantic Council's GeoEconomics Center and a former adviser at the IMF, commented that halting the deal "would send shockwaves all around the financial world," emphasizing the high stakes involved.​

In addition to the SAMR review, Panama's auditor-general, Anel Flores, announced that his office is diligently completing an audit of CK Hutchison's two Panama port concessions. The audit aims to determine compliance with the terms of the 25-year concession, originally signed in 1997 and extended in 2021, amid concerns about the limited returns generated for the Panamanian state.​

BlackRock declined to comment, while CK Hutchison and SAMR did not immediately respond to requests for remarks.