Hong Kong billionaire to sell Panama Canal ports to US firm

A Hong Kong-based company has agreed to sell a majority stake in two key ports on the Panama Canal to a consortium led by U.S. investment firm BlackRock. The deal involves a subsidiary of CK Hutchison Holdings, which operates the ports at the Atlantic and Pacific entrances of the canal.

This comes after former U.S. President Donald Trump repeatedly complained that the Panama Canal was under Chinese control and argued that the U.S. should regain control of the vital shipping route. CK Hutchison announced on Tuesday that it would sell its stake in the ports as part of a $22.8 billion (£17.8 billion) deal. Although CK Hutchison, founded by Hong Kong billionaire Li Ka-shing, is not owned by the Chinese government, it is subject to Chinese financial laws due to its Hong Kong headquarters and has operated the ports since 1997.

The transaction encompasses a total of 43 ports in 23 countries globally, including the two terminals at the Panama Canal. The deal is still subject to approval from the Panamanian government. The Panama Canal, which stretches 82 kilometers across the Central American nation, serves as a crucial link between the Atlantic and Pacific Oceans. Up to 14,000 ships transit the canal annually, including container ships transporting automobiles, natural gas, and other goods, as well as military vessels.

The Trump administration had repeatedly cited reasons for regaining control of the canal and its surrounding areas, including claims that China's influence posed a national security threat, that the U.S.'s initial investment in the canal's construction justified reclaiming control, and that U.S. ships were being overcharged for using the waterway. U.S. Secretary of State Marco Rubio, during a visit to Panama in February, demanded that the country immediately change China's "influence and control" over the canal. The Panamanian government has rejected the U.S. claims, with President Jose Raul Mulino stating that the canal "is and always will be" in the hands of the Central American nation.

In a statement announcing the commercial transaction, CK Hutchison Co-Managing Director Frank Sixt said: "I would like to emphasize that the transaction is purely commercial in nature and has absolutely nothing to do with recent political news reports concerning the Panama ports." BlackRock, one of the world's largest asset management companies, is joined by Swiss company Terminal Investment Limited in the consortium involved in the port acquisition.