A group of investors led by BlackRock, the world’s largest asset manager, is buying a majority stake in ports on both sides of the Panama Canal from Hong Kong-based CK Hutchinson for nearly $23 billion, the companies announces Tuesday.
The deal brings ownership of key Panama Canal ports back into American hands, making it a win for President Donald Trump, who has warned against the perils of China’s growing amount of influence over the canal.
“This agreement is a powerful illustration of BlackRock and GIP’s combined platform and our ability to deliver differentiated investments for clients,” BlackRock CEO Larry Fink said in an official press release.
“These world-class ports facilitate global growth. Through our deep connectivity to organizations like Hutchison and MSC/TIL and governments around the world, we are increasingly the first call for partners seeking patient, long-term capital. We are thrilled our clients can participate in this investment,” Fink added.
BlackRock’s group of investors is buying two Panama Canal ports, Balboa and Cristobal, and various companies owned by CK Hutchinson that control 43 ports in 23 countries worldwide. The Panama Canal transaction will proceed on a different timetable than the rest of the ports, because the Panamanian government will have to confirm it.
National Review reached out to BlackRock for comment on whether the Trump administration was involved in the deal. A company spokesperson referred NR to CK Hutchinson’s statement asserting that geopolitics did not play a role in the transaction.
“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,” CK Hutchinson co-managing director Frank Sixt said.
“I would like to stress that the Transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Port.”
A person familiar with the matter told the Wall Street Journal that BlackRock briefed the Trump administration and Congress on the transaction.
President Trump said during his inaugural address that the U.S. would “take back” the Panama Canal and criticized the deal agreed to by former President Jimmy Carter that ceded control of it after the U.S. built the canal. Carter signed the agreement in 1977 and the U.S. fully relinquished control of the Panama Canal in December 1999, over two decades later. The U.S. built the canal from 1904 to 1914. Thousands of American workers died in the process.
“We have been treated very badly from this foolish gift that should have never been made, and Panama’s promise to us has been broken,” Trump said.
“The purpose of our deal and the spirit of our treaty has been totally violated. American ships are being severely overcharged and not treated fairly in any way, shape, or form. And that includes the United States Navy. And above all, China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump added.
Not long afterwards, Trump’s Secretary of State Marco Rubio went to Panama secured an agreement with Panama to end its development deal with China’s Belt and Road Initiative. Rubio told Panamanian president Jose Raul Mulino that the status quo was unacceptable because of China’s control over the canal, according to a State Department readout.
Before his trip to Panama, Rubio warned in January that CK Hutchinson’s port ownership meant that China could shut down the canal if it ordered the Hong Kong-based firm to do so. At his confirmation hearing, Rubio identified China as the most dangerous adversary the U.S. has ever confronted, even when accounting for the Soviet Union.