In March 2025, a BlackRock-led consortium announced the $22.8 billion acquisition of a controlling stake in Hutchison Port Holdings, securing key operational control over the Balboa and Cristobal ports – two strategically vital hubs at either end of the Panama Canal.
Overview
The Panama Canal has long held outsized importance in global trade. Completed in 1914 under U.S. direction after years of French attempts, it revolutionized maritime logistics by allowing ships to bypass the treacherous Cape Horn. The canal remained under U.S. jurisdiction until the 1977 Torrijos-Carter Treaties initiated its gradual transfer to Panama, culminating in full Panamanian control by 1999. Today, the canal facilitates approximately 6% of global maritime trade and nearly 40% of U.S. container flows, making it one of the most critical chokepoints in the world economy. Its position linking the Atlantic and Pacific Oceans has ensured it remains a focal point in U.S.-China tensions and global supply chain strategies.
BlackRock’s move to acquire these assets fits within a broader pivot towards infrastructure. With interest rates remaining elevated and institutional investors seeking long-term, inflation-linked returns, infrastructure has become a key focus for global asset managers. BlackRock has actively leaned into this trend by expanding its infrastructure platform, which now manages over $50 billion in assets across energy, transportation, and digital infrastructure. Following its $12.5 billion acquisition of Global Infrastructure Partners (GIP), BlackRock has become a dominant force in the sector. This deal furthers that strategy by adding essential port assets with long-term, stable cash flows to its portfolio. Partnering in the deal is Terminal Investment Ltd. (TIL), the port-operating arm of MSC, the world’s largest container shipping company. With TIL’s operational expertise and global reach, the consortium is well-positioned to drive integration, improve efficiency, and expand logistics synergies.
On the other side of the deal is CK Hutchison, the Hong Kong-based conglomerate founded by Li Ka-shing. Operating across four core segments – ports and related services, retail, infrastructure, and telecommunications – CK Hutchison maintains a diversified portfolio with a strong presence in over 50 countries. The sale provides the group with a $19 billion windfall while offloading assets increasingly caught in geopolitical crossfire. With mounting U.S. political pressure and Panama signaling discomfort with Chinese control over strategic infrastructure, Hutchison’s exit helps reduce exposure to growing regulatory and diplomatic risk.
This transaction is far more than a simple infrastructure investment; it marks a shift in global power dynamics over trade routes, with long-term consequences for global commerce and geopolitical alignment.
Overview
The Panama Canal has long held outsized importance in global trade. Completed in 1914 under U.S. direction after years of French attempts, it revolutionized maritime logistics by allowing ships to bypass the treacherous Cape Horn. The canal remained under U.S. jurisdiction until the 1977 Torrijos-Carter Treaties initiated its gradual transfer to Panama, culminating in full Panamanian control by 1999. Today, the canal facilitates approximately 6% of global maritime trade and nearly 40% of U.S. container flows, making it one of the most critical chokepoints in the world economy. Its position linking the Atlantic and Pacific Oceans has ensured it remains a focal point in U.S.-China tensions and global supply chain strategies.
BlackRock’s move to acquire these assets fits within a broader pivot towards infrastructure. With interest rates remaining elevated and institutional investors seeking long-term, inflation-linked returns, infrastructure has become a key focus for global asset managers. BlackRock has actively leaned into this trend by expanding its infrastructure platform, which now manages over $50 billion in assets across energy, transportation, and digital infrastructure. Following its $12.5 billion acquisition of Global Infrastructure Partners (GIP), BlackRock has become a dominant force in the sector. This deal furthers that strategy by adding essential port assets with long-term, stable cash flows to its portfolio. Partnering in the deal is Terminal Investment Ltd. (TIL), the port-operating arm of MSC, the world’s largest container shipping company. With TIL’s operational expertise and global reach, the consortium is well-positioned to drive integration, improve efficiency, and expand logistics synergies.
On the other side of the deal is CK Hutchison, the Hong Kong-based conglomerate founded by Li Ka-shing. Operating across four core segments – ports and related services, retail, infrastructure, and telecommunications – CK Hutchison maintains a diversified portfolio with a strong presence in over 50 countries. The sale provides the group with a $19 billion windfall while offloading assets increasingly caught in geopolitical crossfire. With mounting U.S. political pressure and Panama signaling discomfort with Chinese control over strategic infrastructure, Hutchison’s exit helps reduce exposure to growing regulatory and diplomatic risk.
This transaction is far more than a simple infrastructure investment; it marks a shift in global power dynamics over trade routes, with long-term consequences for global commerce and geopolitical alignment.
Deal Structure and Terms
The deal involves a 90% stake in Panama Ports Company, the entity that owns the key Balboa and Cristobal ports, as well as an 80% stake in Hutchison Ports. This includes all of its management resources, operations and all assets pertaining to the control and operation of these ports. Founder Li Ka-shing will net $19 bn with the remainder of the deal expected to go towards adjustments for minority stakes and the repayment of certain shareholder loans. The equity value of the deal is around $14 bn and also includes a net debt value of $5 bn, with the deal not including any interest in Chinese ports owned by CK Hutchison.
All entities within the deal are expected to generate $1.7 bn in EBITDA in 2025, and consequently, based on the agreed-upon acquisition price of $22.8 bn, the EV/EBITDA multiple is approximately 13x. Looking at precedent transactions, Brookfield is looking to sell PD Ports in the UK for a 20x EBITDA multiple and DP World, one of the largest logistics companies globally, acquired Puertos y Logistica, which owns ports in Chile, for a 13.4x multiple. The graph below showcases previous transactions in this sector of $1+ bn across different regions over roughly the past 5 years, with a mean and median multiple significantly above the 13x multiple BlackRock ended up paying. While the headline valuation suggests a sizeable investment in the Panama Canal, BlackRock managed to secure the assets at a discount due to geopolitical and regulatory turbulence that has impacted the seller.
Fig. 1: Precedent Transactions (Source: Mergermarket)
Reasons for a Discounted Valuation
The discounted valuation compared to recent transactions could be explained by a number of factors that have affected the maritime logistics sector and those that have affected CK Hutchison directly. With Trump’s America-first mentality, he has looked to shake off any kind of Chinese influence, whether it is technology or shipping. Since Li Ka-shing’s Hong Kong-based infrastructure conglomerate has its roots and most of its operations in China, those in Washington fear that the shipment of American goods, particularly military goods, could be sabotaged by port operators. Whether this fear is grounded or not, Europe has also raised this issue as it has detailed potential risks from China’s strategic interest in ports.
Over the past 5 years, CK Hutchison has lost 40% of its market value and, when compared to Hong Kong’s Hang Seng Index, it has underperformed by 21% over the same time period. The group’s lacklustre performance prompted an interest in an additional listing in London that never took place. Therefore, the involvement of BlackRock, one of the largest U.S.-based investment firms, would help to alleviate the situation for Washington policymakers and provide a politically favourable alternative.
Further, Panama’s government considered cancelling its contracts with a subsidiary of CK Hutchison, which would prevent it from operating ports near the Panama Canal. This has been a consequence of Panamanian officials coming under pressure from the Trump administration, which has identified and signalled that China’s presence in the canal was a threat and a violation of the U.S.-Panama Treaty. Under these murky waters of regulatory troubles, CK Hutchison might have felt a need to expedite the sale process, potentially leading to a weakened negotiating position that would explain the discounted valuation.
Deal Rationale and Impact
For BlackRock, this deal could be quite lucrative strategically as it strengthens their position as a major player in global infrastructure investments, following their blockbuster acquisition of Global Infrastructure Partners. Ports are key assets that have stable cash flows and, at the discounted valuation that BlackRock acquired them for, there could be potential for capital gains once the regulatory uncertainties subside. Looking more closely at the Panama Canal and the ports that CK Hutchison holds in Cristobal and Balboa, this acquisition markedly provides BlackRock with access to some of the most important trade routes in the world. It is a pivotal location that connects the U.S. with Asia and Latin America, some of the U.S.’s biggest trading partners. As mentioned, the waterway sees an astonishing amount of traffic, equating to a total value of $270 bn.
BlackRock’s financial expertise within logistical real estate could also come into play and aid in unlocking additional value from the ports, especially after the assimilation of GIP. The third key player in this transaction that could help in creating value is Terminal Investment, which has also taken a stake in CK Hutchison alongside BlackRock. With this deal, it makes the Swiss company one of the world’s largest container terminal operators. Terminal Investment, with the help of BlackRock, will most likely try and integrate its terminals with those of Hutchison Ports and will include harmonising IT systems, operational procedures, and cultures, while preserving Hutchison’s expertise. Part of the success of this deal will depend on how effective this integration will be, coupled with how BlackRock will navigate the regulatory complexities, and might require further investment from the buyer’s consortium. While BlackRock’s share price did fall around 3% after the acquisition, the deal will strengthen their position and ability to share in revenues from global trade, hopefully producing stable but growing cash flows and a positive long-term investment outlook.
For CK Hutchison, the reasons for undergoing this deal are somewhat more straightforward. While representatives argue that this deal had nothing to do with “external factors”, it is hard to ignore the comments and pressure that the Trump Administration put on CK Hutchison. With growing scrutiny on their operations and the Panamanian government threatening to cancel its contracts, the company has reduced its political risk exposure and avoided potential further backlash. The deal also resulted in some shareholder value creation with shares of CK Hutchison rising 22% post announcement, as analysts had previously valued the port assets at $13 bn, implying that the disposal would be value-enhancing for CK Hutchison. The assets involved in the transaction account for less than 10% of revenue, yet CK Hutchison will receive an amount that is close to its entire market value, marking another potential motivator for CK Hutchison.
In terms of the wider impact of the deal, one can see how the Trump administration can claim itself as a winner coming out of this deal. Trump himself has spoken on ridding the Panama Canal of Chinese influence and has brought it under U.S. control. However, the canal was and still is under the jurisdiction and management of Panamanian authorities. While China may not have much of a say in this deal, recent developments from Beijing have highlighted that they have opened investigations into potential antitrust and national security concerns surrounding the deal, which has put a hurdle in the path of what seemed like a well-executed process. CK Hutchison’s share price fell a few percentage points upon this news, and if Beijing continues to try and stop this deal, it will be viewed as a direct challenge by the USA.
Geopolitical Considerations
The transaction has important implications for global trade, solidifying the influence of the U.S. over the canal’s commercial operations and disrupting China’s Belt and Road Initiative ambitions in Latin America. This clearly brings, and will bring, intensified competition between the two global superpowers. The deal now raises key questions on trade regulations, security and economic sovereignty, all of which could have a major impact on the geopolitical landscape in the region.
The Role of the Trump Administration
President Trump has been very vocal on reclaiming the Panama Canal and reducing Chinese influence over critical global infrastructures. To protect national security, the administration allegedly exerted pressure on CK Hutchison to divest its holdings. Additionally, Trump’s endorsement of BlackRock’s acquisition is clearly connected to a willingness from the administration to promote American assets and that critical infrastructures do not fall under enemy control. Despite Trump’s support of the deal, there has been no public policy or direct intervention to influence the transaction. Therefore, it remains unclear to what extent Trump has exerted influence on BlackRock’s acquisition. Furthermore, recent reports have suggested that even before Trump’s presidency, the U.S. has been actively monitoring the Panama Canal and, in general, Chinese investments. This hints that the dispute between the two countries is not entirely attributable to the new administration.
China’s Response
China’s reaction to CK Hutchison’s sale of its Panama port assets has been swift and pointed. Chinese authorities were overall unhappy with the deal brought forward by the two parties, and even urged CK Hutchison to “think twice” about “what side and position they should be on.” Thus, it is clear that for China, the deal is a significant strategic loss, with the Hong Kong and Macau Affairs Office expressing concerns over the long-term implications for China’s influence in Latin America. The move is perceived as a setback for Beijing’s Belt and Road Initiative, which has sought to expand Chinese investments in global trade infrastructure, including Latin American ports and shipping lanes. However, rather than a mere diplomatic setback, China’s response should be analyzed in the broader context of its trade strategy. China has recently diversified its trade routes globally, investing in South American infrastructure. Moreover, many have speculated that China might develop alternative trade routes, such as the Arctic Silk Road or invest in shipping hubs like Brazil’s Santos port. While this sale may be perceived as a setback in the maritime domain, China is likely to refocus its investments towards other critical infrastructures, still in the Latin American region. Therefore, it is incorrect to call CK Hutchison’s sale a “pure” loss for China, but rather it’s a realignment towards alternative economic footholds in the region.
Global Trade Implications
The BlackRock acquisition has broad and multifaceted consequences for global trade. Firstly, for the U.S., the control of the Panama Canal is an opportunity to bolster its position, particularly by regulating maritime commerce and overseeing security measures. The U.S. may also be able to influence shipping policies, particularly concerning China’s commercial activities in Latin America. Additionally, if the current administration decides to exert pressure over port operations, shipping routes could be affected, especially for Chinese firms that rely on the canal for cost-efficient maritime transport. The historical evidence shows that control over strategic ports has often been used as leverage in trade negotiations. Moreover, the implications of this deal extend beyond the U.S. and China. In fact, countries like Brazil, Mexico and Colombia that rely on the Panama Canal for trade could see their tariff structures and transit regulations changed. This reliance is reflected in the cargo volume data shown below. The implications also extend to non-American countries that have trans-Pacific shipping routes, especially if operational adjustments will lead to increased costs or even longer transit times. According to the International Maritime Organization (IMO), any disruption in transit times can have a serious impact on global supply chains, particularly for commodities like crude oil or liquefied natural gas (LNG).
Fig. 2: Share of cargo volume by country 2021 (Source: Panama Canal Authority)
Panama’s Perspective: A Key Player in the Deal
One of the most overlooked aspects of the transaction is the role of Panama itself. Panama has always tried to seek investment from both China and the U.S., maintaining a balance in the delicate geopolitical environment. While the acquisition from BlackRock reinforces U.S. dominance over the port, the role of Panama will likely be diplomatic. Panama's President Jose Raul Mulino recently said that he didn't place any value on reports that the U.S. military is looking into options for ensuring full U.S. access to the Panama Canal, since these reports came from unnamed sources. Therefore, it looks like the Panamanian position is and will be neutral, focusing on emphasizing the nation's sovereignty over the canal. For Panama, the deal could bring both opportunities and challenges. Increased U.S. involvement in port operations may lead to infrastructure improvements and greater investment, but it also risks limiting Panama’s ability to independently negotiate trade agreements with China. Additionally, the sale raises questions about Panama’s broader economic strategy: Will the government align more closely with Washington’s trade policies, or will it continue to foster economic ties with Beijing?
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Outlook and Conclusion
While the BlackRock-led consortium has acquired strategic port assets at a discounted 13x EV/EBITDA multiple, the deal is far from risk-free. Regulatory uncertainties remain a major overhang. China’s investigation signalled its unease with losing strategic ground in Latin America, particularly as CK Hutchison’s ties to China bring political sensitivities into play. Meanwhile, reports in Axios and other outlets suggest U.S. military officials are quietly exploring ways to secure greater operational access to the canal, raising questions over how "commercial" the deal truly is versus how much it aligns with broader U.S. strategic objectives.
These political crosscurrents could complicate post-deal integration and even delay regulatory clearance in key jurisdictions. There’s also the risk that future administrations, either in Panama or the U.S., change course or raise objections over foreign ownership of critical infrastructure. Moreover, while BlackRock has strong financial and operational partners in Terminal Investment Ltd., aligning systems, cultures, and governance structures across such a high-profile asset will require precision and sustained capital investment.
Still, from a commercial standpoint, the acquisition appears sound. Ports are long-duration assets with relatively stable cash flows, and Balboa and Cristobal are among the most critical logistics hubs in the Western Hemisphere. With traffic along the Panama Canal expected to rise in the coming decades, BlackRock stands to benefit from both operational efficiencies and long-term value appreciation. The discount secured reflects both geopolitical headwinds and CK Hutchison’s weakened negotiating position, not a fundamental weakness in the assets themselves.
Ultimately, while the transaction is undeniably geopolitical in nature, partly engineered to reduce Chinese influence near a U.S. strategic asset, it is not devoid of commercial logic. For BlackRock, the acquisition deepens its presence in global infrastructure and supports its long-term investment thesis of targeting essential, cash-generating real assets. Whether this becomes a model for future deals or a cautionary tale will depend on how the next few years unfold.
Outlook and Conclusion
While the BlackRock-led consortium has acquired strategic port assets at a discounted 13x EV/EBITDA multiple, the deal is far from risk-free. Regulatory uncertainties remain a major overhang. China’s investigation signalled its unease with losing strategic ground in Latin America, particularly as CK Hutchison’s ties to China bring political sensitivities into play. Meanwhile, reports in Axios and other outlets suggest U.S. military officials are quietly exploring ways to secure greater operational access to the canal, raising questions over how "commercial" the deal truly is versus how much it aligns with broader U.S. strategic objectives.
These political crosscurrents could complicate post-deal integration and even delay regulatory clearance in key jurisdictions. There’s also the risk that future administrations, either in Panama or the U.S., change course or raise objections over foreign ownership of critical infrastructure. Moreover, while BlackRock has strong financial and operational partners in Terminal Investment Ltd., aligning systems, cultures, and governance structures across such a high-profile asset will require precision and sustained capital investment.
Still, from a commercial standpoint, the acquisition appears sound. Ports are long-duration assets with relatively stable cash flows, and Balboa and Cristobal are among the most critical logistics hubs in the Western Hemisphere. With traffic along the Panama Canal expected to rise in the coming decades, BlackRock stands to benefit from both operational efficiencies and long-term value appreciation. The discount secured reflects both geopolitical headwinds and CK Hutchison’s weakened negotiating position, not a fundamental weakness in the assets themselves.
Ultimately, while the transaction is undeniably geopolitical in nature, partly engineered to reduce Chinese influence near a U.S. strategic asset, it is not devoid of commercial logic. For BlackRock, the acquisition deepens its presence in global infrastructure and supports its long-term investment thesis of targeting essential, cash-generating real assets. Whether this becomes a model for future deals or a cautionary tale will depend on how the next few years unfold.
By Victor Blanc, Jacopo Bianchini, and Kabir Wali
Sources:
- Reuters
- The Wall Street Journal
- Axios
- OECD
- BTS
- CK Hutchison
- Panama Canal Authority
- Mergermarket
- The Financial Times
- Statista