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Beijing Demands Equal Cosco Stake to Approve $22.8B Ports Sale

Parties are weighing Cosco’s entry to avoid Beijing’s block ahead of a July 27 deadline.

Container ship Cosco Development, registered and sailing under the flag of Hong Kong, with capacity for more than 13,000 containers, is seen at the Agua Clara locks in Colon, 56 miles from Panama City on May 2, 2017.
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Overview

  • Beijing has signaled it will block the sale of 80% of CK Hutchison’s global ports business unless state-owned Cosco receives an equal stake in the $22.8 billion deal.
  • BlackRock, MSC and CK Hutchison are now open to adding Cosco to their consortium to avert Chinese obstruction.
  • Exclusive negotiations between the trio expire on July 27, after which Cosco can be formally integrated into the transaction.
  • Chinese authorities have launched antitrust and security reviews and directed state firms to freeze any new deals linked to Li Ka-shing’s enterprises.
  • Italian shipping company MSC has emerged as the consortium’s lead backer, with BlackRock expected to take over the Panama Canal terminals.