BlackRock, Global Infrastructure Partners (GIP) and Terminal Investment (the consortium) are set acquire the 90% interest of Hutchinson Port Holdings' (HPH) in Panama Ports Company which owns and operates the ports of Balboa (picutred) and Cristobal in Panama.
In addition, the consortium will acquire CK Hutchison’s 80% controlling interest in subsidiary and associated companies owning, operating and developing a total of 43 ports comprising 199 berths in 23 countries, under subsidiary HPH. The Hong Kong-headquartered group has ports in Asia, including in Malaysia, Myanmar, Thailand and Vietnam, in Brsibane and Sydney in Australia and the Middle East, including Oman, Saudi Arabia and the United Arab Emirates. There are other ports in Mexico, the Bahamas, the UK, the Netherlands, Sweden, Spain, Poland, Germany and Belgium.
The sale doesn't include any interest in ports in Hong Kong, Shenzhen and South China, or any other ports in China.
Of the ports included in the deal, it will also include Hutchison Ports' management resources, operations, terminal operating systems, IT and other systems, and other assets appertaining to control and operations of those ports.
The total price for all the assets is $22.8 billion, according to a CK Hutchison announcement. While GIP is owned by BlackRock, Geneva-headquartered Terminal Investment (TI) is owned by the Mediterranean Shipping Company.
The Panama transaction will proceed separately on confirmation by the government of Panama of the proposed terms of the purchase and sale. The ownership of the Panama ports have been a matter of recent controversy as US president Donald Trump sought to exert more US control over the important strategic canal for global shipping, however CK Hutchison's co-managing director Frank Sixt stressed that the deal "is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports."
Sixt added in a statement: “This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received. As a result, the transaction valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders."
Sixt added: "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 $19 billion to our group."
Sixt stressed the acquisition is subject to overcoming a number of regulatory hurdles.
In a statement, Larry Fink, BlackRock’s chairman and chief executive officer (CEO) Larry Fink said: "These world-class ports facilitate global growth. Through our deep connectivity to organisations like Hutchison and MSC/TI and governments around the world, we are increasingly the first call for partners seeking patient, long-term capital.”
GIP's chairman and CEO Bayo Ogunlesi said: “We are delighted to partner with Terminal Investment Limited 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.”
GIP has recently opened up an office in Doha after its acquisition by BlackRock last year.
Terminal Investment’s chairman and president of the MSC Group Diego Aponte 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."
