Hong Kong-based CK Hutchison has agreed to sell the majority of its port holdings to the Blackrock-TiL consortium in a deal valued at USD22.8 billion.
According to sector analyst Drewry, the deal will propel shipping group MSC to the top of its Global Terminal Operator (GTO) league.
Speaking on behalf of Terminal Investment Limited (TiL), chairman of TiL and president of the MSC Group, Diego Aponte said: “Our relationship with Hutchison Ports goes back a long way and is a relationship of mutual respect and friendship. Furthermore, we are very pleased to partner with BlackRock and Global Infrastructure Partners (GIP), with whom we share a longstanding relationship. We have a very high regard toward the Hutchison Ports management team, and once this transaction closes, we look forward to welcoming them into our larger family. We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially.”
Hutchison Ports (currently owned 80 percent CK Hutchison and 20 percent PSA International), operates a portfolio of 43 maritime container terminals outside of China and Hong Kong. The combined capacity of these terminals was over 73 million teu at the end of 2023, with total throughput of almost 47 million teu.
Blackrock-TiL will acquire CK Hutchison’s 80 percent effective and controlling interest in subsidiary and associated companies, along with all Hutchison Port Holding’s (HPH) management resources, operations, terminal operating systems, IT systems, and other assets relating to control and operations of those ports.
Blackrock-TiL will also acquire HPH’s 90 percent interests in Panama Ports Company, which owns and operates the ports of Balboa and Cristobal in Panama. This is subject to approval by the government of Panama. The deal does not include any interest in the HPH Trust, which operates ports in Hong Kong, Shenzhen and South China, or any other ports in China.
“These world-class ports facilitate global growth. Through our deep connectivity to organisations… we are increasingly the first call for partners seeking patient, long-term capital. We are thrilled our clients can participate in this investment,” said BlackRock chairman and ceo, Larry Fink.
“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,” said co-managing director of CK Hutchison Frank Sixt, adding that “the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.”
The terms of both transactions having been agreed in principle, subject to confirmatory due diligence, settlement of definitive documentation, receipt of any necessary regulatory approvals, amongst others.
Drewry’s assessment of the deal is that the Hutchison portfolio is complementary to the existing terminal assets under the control of MSC – with the operations in the high growth Southeast Asia and Mexican markets seen to be particularly advantageous.
There are however a number of markets where the deal may result in excess concentration, including Panama, Rotterdam (the Netherlands) and Spain. “We therefore expect that the transaction may well trigger some divestments to meet the requirements of the various competition regulators,” it said.
Drewry added the partnership between MSC and Global Infrastructure Partners (GIP), which was acquired by Blackrock in 2024, is longstanding. GIP initially acquired a 35 percent stake in TiL in 2013, which although was subsequently diluted to 20 percent, it has remained invested in the business for longer than many other infrastructure funds.
The analyst noted that synergies between TiL and MSC’s carrier business are clear – the ability to guarantee volumes from the liner gives TiL a clear edge when negotiating both concessions and acquisitions, and GIP (now Blackrock) provides a source of alternative funding that has undoubtedly been well utilised to build the portfolio.
