BlackRock Leads $23 Billion Deal for Panama Canal Ports

Oh buoy! The largest asset manager in the world announced the biggest infrastructure deal in its history on Tuesday.

BlackRock and its Global Infrastructure Partners unit agreed to take control of two major ports at the Pacific and Atlantic entrances of the Panama Canal. The titanic port deal immediately made political waves, even as the seller, Hong Kong-based conglomerate CK Hutchison, denied politics were at play.

Under Pier Pressure

The Panama Canal was built by the United States in the early 20th century, and handed over to Panama in 1999. The 51-mile waterway links the Atlantic and the Pacific oceans by cutting through Central America and is essential to the US economy: Roughly 70% of traffic goes to or from the US.

For the nation of Panama, it has been a spectacular business: Last year, the canal generated nearly $3.5 billion in net income from about $5 billion in revenue. The Trump administration and Republican lawmakers have complained in recent months that US ships are being charged too much for using the canal: Authorities collected an average $341,000 per vessel in 2023, up 59% from 2018.

But the administration also singled out another alleged threat to American business: There are foreign-owned ports operating on either side of the canal — which Trump has claimed, without offering any evidence, is proof that China has taken control of the waterway. CK Hutchison has run Panama’s Balboa and Cristobal ports under a concession since 1997 that was extended to 2047. For BlackRock, the geopolitically sensitive purchase is part of a big push for alternative assets: 

• The asset manager and its consortium will acquire 90% of Panama Ports Co., which operates the entryways in Balboa and Cristobal, and 80% of the Hutchison Ports group, which adds 43 other ports in 23 countries to the deal. Hutchison said the deal totals $22.8 billion, including $19 billion in cash proceeds.
• BlackRock bought its Global Infrastructure Partners unit for $12.5 billion last year, inserting itself into the business of seaports and airports, electricity, and digital infrastructure around the world. The unit has investments in the Port of Melbourne, airports in Sydney and greater London, US liquefied natural gas, and French wastewater management — underlining BlackRock CEO Larry Fink’s bet that private infrastructure will open up new growth at his firm, which made $20.4 billion in revenue last year.

Free Will: CK Hutchison, a massive business empire built by Hong Kong billionaire Li Ka-shing, insisted Monday that its sale was “purely commercial in nature and wholly unrelated to recent political news reports.” The company said it conducted a “rapid, discrete” sale process that received numerous bids. BlackRock’s acquisition must be approved by Panamanian authorities, while Washington is probably pleased as punch: Multiple reports said Fink briefed the Trump administration and Congress on the acquisition.