The MSC Regulus container ship, operated by Mediterranean Shipping Co. (MSC), left, the Monte Verde container ship, operated by Hamburg Sud, centre, and the OOCL Germany container ship, operated by Orient Overseas Container Line Ltd., docked at the Port of Felixstowe Ltd., a subsidiary of CK Hutchison Holdings Ltd., in Felixstowe, U.K., on Thursday, June 24, 2021.
Chris Ratcliffe | Bloomberg | Getty Images
Hong Kong’s CK Hutchison will not sign a deal next week to sell its two port operations near the Panama Canal to a BlackRock-led group, two people with direct knowledge of the matter said, amid growing pressure from Beijing.
China’s market regulator said it will carry out an antitrust review on the Panama port deal in accordance with law to protect fair competition and safeguard public interests, its official WeChat account showed late on Friday.
The telecoms-to-retail conglomerate owned by tycoon Li Ka-shing this month agreed to sell most of the global $22.8 billion ports business, including assets it holds along the strategically important Panama Canal, to a group led by BlackRock.
Definitive documentation for the two port operations near the Panama Canal was expected to be signed by April 2, according to the sale announcement made on March 4.
One of the people, who declined to be identified due to the sensitivity of the matter, did not elaborate, saying only that the definite documentation would not be signed due to “obvious reasons.”
The person added the development does not mean the deal has been called off, and April 2 is not a hard deadline. The second source, who also declined to be identified for similar reasons, said talks are still very much underway.
Negotiation for the overall deal that covers a total of 43 ports in 23 countries is on exclusive basis between CK Hutchison and the consortium for 145 days.
Local media including Singtao Daily and The South China Morning Post first reported the news.
CK Hutchison did not immediately respond to a Reuters request for comment.
The conglomerate has been caught in China’s crosshairs in the highly politicized deal which is expected to garner the firm more than $19 billion in cash.
Chinese authorities have reacted negatively to plans by the conglomerate to sell its ports assets, while the deal was hailed by U.S. President Donald Trump who said he wants to retake control of the strategic waterway.
Over the past two weeks, pro-Beijing Hong Kong newspaper Ta Kung Pao has published a series of commentaries criticizing the deal for harming China’s national interests and depicting it as a betrayal of China and is a “perfect cooperation” with the U.S. strategy to contain China.
China’s Hong Kong and Macau Affairs Office reposted some of the commentaries on its website, which fueled speculation Beijing could take steps to try to scupper the sale.
A CK Hutchison unit operates two of the five ports adjacent to the Panama Canal, which manages about 3% of the global sea-borne trade. Panama first awarded the concession to the company in 1998 to run the ports and extended it for another 25 years in 2021.
Beijing’s criticism of CK Hutchison’s move to sell its ports business is a precursor to heightened political scrutiny of major Chinese business divestments involving American buyers, analysts have said.
Bloomberg News, earlier in the week, reported that Chinese authorities had told state-owned firms to hold off on any new deals with businesses linked to tycoon Li and his family.
