China has threatened to block a deal for dozens of global ports – including two near the Panama canal – if its own shipping giant doesn’t get a sizable stake, according to a report Thursday.
The deal, valued at around $20 billion, hands over more than 40 global ports owned by Hong Kong business magnate Li Ka-Shing to US asset manager BlackRock and Mediterranean Shipping Company.
China is demanding that Cosco, its largest shipping firm, be an equal partner to BlackRock and MSC in the deal, sources familiar with the matter told the Wall Street Journal.
BlackRock, MSC and Li’s firm, CK Hutchison, are all open to that idea, sources said.
“As far as I know, Chinese State Administration for Market Regulation once stated that it would review in accordance with the law the plan of CK Hutchison Holdings to sell assets such as the Panama Canal Port, to protect fair market competition and safeguard public interests,” Liu Pengyu, spokesperson for the Chinese Embassy, told The Post in a statement.
“As principle, I would like to stress that China has always firmly opposed economic coercion and domineering and bullying practices.”
MSC and Cosco did not immediately respond to noti.group’s requests for comment. BlackRock declined to comment.
The firms are currently staring down a July 27 deadline, when exclusive talks between the three partners will end and Cosco can be added to the deal.
But that change will likely anger President Trump, who has viewed the deal as a national security win as he argues that the US needs to “take back” the waterway.
Chinese officials, meanwhile, have told Chinese state-owned companies to freeze any incoming deals with Hutchison or other businesses linked to Li, sources told the Journal.
The inclusion of Cosco emerged as a way to nudge the deal forward following intense US-China trade talks in Switzerland, Bloomberg reported last month.
Chinese authorities have told BlackRock, MSC and Hutchison that without Cosco’s inclusion in the deal, Beijing will take steps to block the sale, sources said.
And the firms involved in the deal can’t afford to burn bridges with China.
BlackRock and Hutchison both have interests in the nation, and MSC is one of the largest shippers of Chinese exports in the world.
Italian billionaire Gianluigi Aponte’s family-run business, MSC, has emerged as the lead investor in the deal, though BlackRock is notably expected to take over the two key Panama ports included in the sale.
The deal is expected to position MSC as the world’s largest terminal operator.
It wouldn’t be the first time China has squashed such a deal.
In 2014, it blocked a major shipping alliance between MSC, Denmark’s AP Moeller-Maersk and France’s CMA CGM.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
