CK Hutchison have announced that they have agreed to sell much of their ports business. In an announcement issued on the 4th March, CK Hutchison stated that it had agreed to sell two parts of their Hutchison Ports business; Hutchison Ports Holding’s 90% equity in the Panama Ports Company and, in what appears to be a separate deal, its interests in all of the ports business outside Hong Kong and China.
The purchaser of both groups of assets is a joint venture between the investment company BlackRock and the shipping and logistics company MSC. Together they have formed what they call the “BlackRock-TiL Consortium”.
The price for all of the port assets has been agreed at US$22.8bn, which includes both groups of assets, although the individual price of each businesses has not been disclosed. It is not explained why the agreement to sell is split into two parts, separating the Panamanian ports from the rest of the Hutchison Ports businesses, although this may be due to the political sensitivity of the ports in Panama.
Although particular attention is being paid to the ports in Panama, by far the largest part of Hutchison’s business that is being sold is the port interests outside China. According to CK Hutchinson, these include “a total of 43 ports comprising 199 berths in 23 countries, together with all HPH’s management resources, operations, terminal operating systems, IT and other systems, and other assets appertaining to control and operations of those ports”. Hutchisons operate port and terminal complexes such as Felixstowe in Britain, Duisburg Container Terminal in Germany and Jakarta International in Indonesia. In 2023 the company handled 82m TEU.
The joint venture that is buying these assets is a combination of MSC and Global Infrastructure Partners, now part of BlackRock. They have had a relationship since 2013. Both have interests in port and wider logistics property assets. However, the importance of ports to MSC’s wider business is quite different to that of BlackRock. For example, it is unclear what sort of relationship MSCs shipping business will have with these newly acquired port assets. If MSC is able to merge the former Hutchison Port assets into its existing portfolio of container terminals it will become one of the largest, possibly the largest, container terminal operator in the world. Combined with its huge fleet of ships it will make MSC enormously influential in the shipping market.
It is unclear why CK Hutchinson sold at this time. The company denies that it has been influenced by the statements of the American President about the ports in Panama. CK Hutchinson is a long established Hing Kong company, that grew out of the interests of the Hutchison company and those of the family of Sir Ka-shing Li. CK Hutchison owns its ports interests, including terminals in Hong Kong and China, through Hutchison Ports Holdings Trust, which is quoted on the Singapore stock exchange and it appears that it will remain so.
Author: Thomas Cullen
Source: Ti Insight
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