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A US$22.8 billion agreement for CK Hutchison to sell its global network of ports to a BlackRock-led consortium is not only the blockbuster infrastructure deal of 2025, but is also likely to result in China examining its dependence on the Panama Canal for its vast commodities imports from Brazil and Argentina – as well as container traffic.
The first part of the sale involves CK Hutchison's 90% interest in Panama Ports Company ( PPC ), which owns and operates the Balboa and Cristobal terminals at either end of the Panama Canal.
The second element ( HPH Ports ) is the group's 80% interest in subsidiaries and associated companies involved in owning, operating and developing 43 ports across 23 countries, representing most of its port assets outside of China.
The transaction does not include any interest in the group‘s unit which operates ports in Hong Kong, Shenzhen and other ports in China.
The BlackRock-TiL consortium that reeled in the deal is composed of BlackRock itself, Global Infrastructure Partners, which BlackRock acquired last year, and MSC Group‘s shipping line subsidiary Terminal Investment Limited ( TiL ).
Goldman Sachs is advising CK Hutchison on the deal. The acquisition will strengthen the global position of TiL and MSC Group. TiL is already among the world’s largest container terminal operators, with a presence in over 70 container terminals in 31 countries.
Diversified transport routes
“This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received – as a result, the transaction valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders," says CK Hutchison’s co-managing director Frank Sixt.
"I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports," Sixt adds.
Looking beyond the infrastructure transaction itself, the speed with which US pressure has resulted in Panama exiting the Belt and Road Initiative, followed soon after, coincidentally or not, by the agreement on the CK Hutchison ports, is likely to accelerate China's policy of highly diversified global transport routes. US President Donald Trump has said that he wants to take back control of the Panama Canal to enhance national security.
Only last week, a new overland China-Europe route was inaugurated, bypassing the Russian rail network, as part of this diversification strategy, even though relations with Russia are good.
Kazakhstan Railways started the new rail container route that avoids running on the Russian network. Operated by its subsidiary KTZ Express and China Railway Container Transport, the trains run via Kazakhstan, Turkmenistan, Iran, and Türkiye. The first train left from Chengdu, the capital of southwestern China's Sichuan province.
Road and rail links
Over the past two years, many shipping lines have suspended routes through the Suez Canal following attacks by the Houthis on commercial vessels. This Suez Canal route is used not only for Chinese container traffic to European ports but also onwards towards US East Coast ports.
The alternative container route from China to the US East Coast is via the Panama Canal. But the Panama Canal is just as important to China for the huge quantities of wheat and soyabean being imported from Brazil and Argentina, using Panamax bulk carriers.
In recent years, China has been involved in the renovation of the Argentine rail network, moving agricultural produce to the ocean-going ports in Buenos Aires.
At the same time, it has been focused on improving road and rail links from the Brazilian agricultural heartlands running northwards to ports such as Barcarena, which are closer to the Panama Canal than the southern Brazilian ports of Santos and Paranagua.
China Communications Construction Company and Vale are also building a rail line to carry iron ore from Brazil’s Carajas complex, the world’s largest iron ore mine, to Barcarena.
Last year, China Merchants Port Holdings signed a letter of intent with Brazilian port authority Portos do Parana, which controls two major ports in Brazil, including the country’s second biggest by tonnage, the Port of Paranagua. China Merchants owns a majority stake in the Paranagua Container Terminal ( TCP ), which handled 1.2 million TEUs ( 20-foot equivalent units ) in 2023.
In addition to being Brazil's third largest container port, the Port of Paranaguá is the largest bulk port in Latin America, handling mainly soyabean and crushed soyabean meal.
Bigger carriers
In planning for the future, China is most likely taking into consideration potential global conflicts, as well as sanctions such as those imposed on Russia by the United States and the European Union, and providing for a scenario where it won’t have access to the Panama Canal.
The global container shipping trend has been towards mega vessels carrying up to 24,000 TEUs, which are too big for the Panama Canal. But the canal system has been optimized in recent years. In September 2024 the MSC Marie set a new record as the largest containership to transit the Panama Canal, with over 17,000 TEUs.
On the Pacific Coast, Cosco Shipping Ports, a subsidiary of container line Cosco Shipping, has developed a new port in Chancay, Peru. Chancay will have two multipurpose berths and two containership berths capable of handling 1 million TEUs per year. For China's vast copper needs, the main exporter is Chile on the Pacific Coast. Both of these routes directly run to Chinese ports with no bottlenecks.
All countries are taking a closer and harder look at their global supply routes, and though China is likely to continue expanding its Panamax fleet, it will also be using bigger Capesize bulk carriers and 24,000TEU mega vessels that sail around the Cape of Good Hope and Cape Horn.
CK Hutchison says the port sale will proceed expeditiously, subject to the BlackRock-TiL consortium conducting normal confirmatory due diligence, settlement of definitive documentation, and regulatory approvals.
The aggregate enterprise value for 100% of the HPH Ports Sale Perimeter, including the Panama ports, has been agreed at US$22.8 billion. The allocation of transaction proceeds for the PPC and HPH transactions has also been agreed in principle. A definitive documentation for the Panama ports deal is expected to be signed by April 2.
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