[HONG KONG] China’s largest shipping company is among the firms in talks to invest in a multinational consortium seeking to buy billionaire Li Ka-shing’s global ports, according to people familiar with the matter, in an effort to ease Beijing’s concerns over the controversial deal.
China Cosco Shipping is one of several Chinese state-backed companies in discussions with the consortium led by Italian billionaire Gianluigi Aponte’s Terminal Investment on matters including how they might participate in the port deal, the people said, asking not to be identified discussing private information. The buying group also includes US firm BlackRock and its Global Infrastructure Partners unit.
The inclusion of Chinese investors in the consortium emerged as one of the options to advance the ports sale after high-stakes talks in Switzerland last month between Chinese and US officials, some of the people said. Beijing has fiercely opposed the sale – including two ports along the Panama Canal – over concerns it could affect its global shipping and trade ambitions. Meanwhile, US President Donald Trump celebrated the deal as returning the strategic waterway to American influence.
Once completed, the agreement to sell the two Panama ports and 41 others around the world is expected to net tycoon Li’s CK Hutchison Holdings more than US$19 billion in cash.
Talks are ongoing and the details are not yet finalised, the people said. Cosco, CK Hutchison and the Aponte family’s MSC Mediterranean Shipping, which controls Terminal Investment, did not respond to requests for comment. BlackRock declined to comment.
The talks are the latest twist in one of billionaire Li’s most geopolitically challenging deals amid escalating tensions between the world’s two largest economies over global trade. The development has raised hopes that it could ease China’s concerns over the proposed transaction, which has been blasted by pro-Beijing newspapers as a betrayal of the nation and kowtowing to US pressure. The country’s market watchdog has vowed to review the sale, and Bloomberg News reported in March that authorities told state-owned firms to hold off on any new collaboration with businesses linked to Li and his family.
Despite the progress of the talks, a deal could still falter. A 145-day period for exclusive talks between CK Hutchison and the consortium ends in late July, and the parties have already missed an initial goal of signing an agreement on the Panama part of the deal by early April.
The current structure of the buyer consortium will give Terminal Investment ownership of all the ports except the two in Panama, whose control will go to BlackRock, Bloomberg reported in April. Terminal Investment parent MSC has 28 offices across Greater China. It runs a terminal in China’s eastern city Ningbo and operates dozens of shipping services between the country and the rest of the world.
In an interview with the Financial Times earlier this week, the head of the Panama Canal Authority said the consortium’s structure means a concentrated terminal ownership which could threaten the waterway’s competitiveness and neutrality. In response, China’s Ministry of Foreign Affairs said it supports Panama in defending its independence and reiterated its opposition to economic bullying. BLOOMBERG
