China's antitrust regulator has announced that it will review an agreement between Hong Kong-based CK Hutchison and a consortium led by BlackRock to sell two ports on the Panama Canal. This is reported by the Financial Times, writes UNN.
Details
According to media reports, the deal is part of a larger $22.8 billion transaction involving 43 ports worldwide. The move comes amid criticism from China, which has expressed concerns about the influence of U.S. investors on strategically important infrastructure.
The State Administration for Market Regulation of China (SAMR) has issued comments highlighting that it is closely monitoring the deal and will review it from the point of view of protecting fair competition. Beijing has expressed concern that the deal could affect the domestic shipping market and international cargo trade in China.
It is not yet clear whether Chinese regulators intend to review the entire deal or will limit their attention to ports in Panama.
According to two sources familiar with the situation, the two Panamanian ports account for only a small portion of the deal's value, which includes ports in Europe, Southeast Asia and the Middle East.
However, sources said, SAMR is gathering information and preparing to launch an investigation. The regulator is assessing whether the sale violates the rules or restricts competition in domestic shipping and international cargo trade in China.
According to two people familiar with the matter, SAMR consulted with at least one industry expert to work on the case. The expert suggested that the regulator impose conditions on the BlackRock-led consortium's purchase to ensure that the deal does not undermine the competitiveness of Chinese shipping companies and cargo owners, the people added.
The official signing of the Panama Ports Agreement is expected on April 2. However, this may now be delayed, sources say.
However, negotiations between the BlackRock-led group and CK Hutchison to get the deal across the line are ongoing. Both sides are preparing for a potential SAMR review.
