An investor group backed by BlackRock (BLK.N) agreed to buy a majority stake in the Hong Kong-based company that runs ports along either side of the Panama Canal, giving a U.S. firm control of key docks amid pressure from the White House to take them from China.
The $22.8 billion sale by Hong Kong’s CK Hutchison (0001.HK) to U.S. and Swiss investors also includes dozens of ports in other countries, the companies announced Tuesday. The move appears to be a win for U.S. President Donald Trump’s aggressive diplomacy just hours before he is due to tout the successes of the first six tumultuous weeks of his second term in an address to the U.S. Congress.
He vowed to wrest control of the strategic canal connecting the Atlantic and Pacific Oceans during his January 20 inauguration speech, falsely claiming China is operating it. The transaction appears to hand command of the vital docks on both entrances of the canal to U.S. interests.
Trump refused to rule out military action to assert U.S. control over the canal, which is operated by the Panama Canal Authority, an autonomous agency overseen by the Panamanian government, and surrounded by several ports.
The U.S. president has complained about the presence of Chinese and Hong Kong-based companies in Panama, and American officials and politicians have said CK Hutchison’s control of the ports represents a security risk for the operation.
Last year, about 12,000 ships used the canal, which connects 1,920 ports across 170 countries. But its position is strategic for Washington as over three-quarters of all vessels passing through the canal originate in or are bound for the U.S.
The sale of licenses will result in the consortium gaining a 90% stake in Panama Ports Company, which has been the operator of the Balboa and Cristobal ports in the Central American country for more than two decades, CK Hutchison said in a statement.
BlackRock, the world’s largest asset management firm based in New York, has briefed the White House and congressional leadership on the deal, a person familiar with the transaction said.
This would be BlackRock’s largest infrastructure investment to date, that person said.
In theory the deal, by showing the firm to be acting in Trump’s favor, could ease Republican pressure on BlackRock and its CEO, Larry Fink, over its past embrace of the use of environmental, social and governance (ESG) factors in investing.
But the company and Fink have remained under attack by Republicans and supporters of Trump’s MAGA movement on climate and diversity issues.
The U.S. State Department, White House, National Security Council and Panama’s government did not respond to requests for comment.
