The Port of Balboa at the Pacific entrance of the Panama Canal. (Walter Hurtado/Bloomberg)
Billionaire Li Ka-shing, Hong Kong’s most famous tycoon, won’t go ahead with the expected signing next week of a controversial deal to sell his Panama Canal ports to a consortium including BlackRock Inc., according to media reports.
While Li’s flagship CK Hutchison Holdings Ltd. won’t sign the deal, which was expected to occur on April 2, it doesn’t mean the sale has been called off, the South China Morning Post reported, citing a source it didn’t identify. Significant details remain to be decided due to the complexity of the transaction, it said. Local media outlets including Sing Tao also reported the agreement wouldn’t be signed.
The Balboa and Cristobal ports on either side of the 51-mile Panama Canal, which connects the Atlantic and Pacific oceans, form a key part of the deal involving a total of 43 CK Hutchison facilities. The Hong Kong conglomerate would net more than $19 billion in cash, should the transaction go through.
It’s the latest twist in one of the most geopolitically complicated deals ever for the 96-year-old business titan, given the two main users of the Panama canal are the U.S. and China. Beijing’s concern was that the ports sale could threaten the country’s shipping and trade interests, while President Donald Trump was celebrating it as the return of the canal back to U.S. control from China.
READ MORE: Hong Kong Raises Concerns About Deal for Panama Canal Ports
The planned sale had highlighted the political risks for companies based in Greater China amid increasing trade tensions between the world’s two largest economies.
That’s despite CK Hutchison having limited exposure to both countries: the conglomerate is registered in the Cayman Islands and accrues only 12% of its revenue from Greater China, while Europe, Canada and Australia make up the bulk of the rest.
The move came after China told state-owned firms to hold off on any new collaboration with businesses linked to Li and his family, and authorities began looking into the transaction for potential security or antitrust violations.
While CK Hutchison has kept ports in Hong Kong and mainland China out of the sale, the deal has been criticized by pro-Beijing newspaper Ta Kung Pao for “spineless groveling” to U.S. pressure. In a sign of state backing, the commentaries were reposted by China’s top office on Hong Kong affairs. The city’s leader also weighed in, saying concerns over the deal deserved “serious attention” and vowing to handle the deal in accordance with the law and regulations.
Pro-Beijing media and individuals affiliated with Chinese authorities stepped up their criticism in the week ahead of the April 2 deadline for the signing of the definitive agreement. Ta Kung Pao ran articles almost every day denouncing the sale, while a spokesman for China’s Ministry of Foreign Affairs separately said Beijing opposes strong-arm tactics for economic gains.
“China has always firmly opposed the use of economic coercion and bullying to infringe upon the legitimate rights and interests of other countries,” the ministry’s spokesman Guo Jiakun said on March 27.
