Hong Kong firm proposes selling port terminals shares to a Chinese corporation
In a move that highlights the geopolitical significance of the transaction, Chinese state-owned maritime conglomerate, China Cosco Shipping Corporation (Cosco), has been identified as a potential investor in the sale of port facilities owned by CK Hutchison. The deal, valued at approximately $23 billion, involves over 40 container terminals globally, excluding sensitive locations near the Panama Canal.
The buyer consortium for the deal is led by BlackRock and MSC, with Cosco set to join the group. CK Hutchison, a global port terminal operator, disclosed this strategic inclusion as crucial for obtaining Beijing’s approval, as the Chinese government had indicated it would block the deal without having a stake.
The sale was initially announced to be led by a consortium including BlackRock and Geneva-based shipping line MSC. However, discussions with members of the initial consortium continue, with Cosco potentially replacing one of the initial members. The exclusive negotiation period regarding the sale of Hutchison Ports Group has expired.
The U.S. has identified Cosco as an arm of China's military that has used unfair trade practices. Despite this, the inclusion of Cosco in the deal underscores the delicate balance between U.S. and Chinese interests in global port assets.
Beijing has expressed its intention to block the transaction if it doesn't include a share for Chinese investors. The Chinese investor in question is identified as Cosco, a Chinese maritime conglomerate. It remains to be seen how the U.S. will respond to this development.
As negotiations continue, the planned sale of these port facilities promises to be a significant event in the global port industry, with far-reaching geopolitical implications.
The Chinese state-owned maritime conglomerate, Cosco, is poised to join the financial consortium led by BlackRock and MSC, signifying a significant business move in the global port industry. The strategic inclusion of Cosco is crucial for obtaining Beijing's approval, as the Chinese government had expressed its intention to block the deal without having a stake.
