A consortium led by Mediterranean Shipping Company continues to push for securing a $22.8 billion deal that will bring 41 ports into the fold of the line’s subsidiary, Terminal Investment Ltd (TIL).
This is despite regulatory scrutiny and delays which resulted in the consortium missing an April deadline to finalise agreements, particularly in respect of control over the ports of Balboa and Cólon.
The terminals of the two ports, respectively situated in Panama City and on the Pacific shore of one of the world’s most crucial waterways, are both under concessionaires held by Hutchison Port Holdings, representing a major stake in global container movement.
The consortium, also consisting of investment firm BlackRock and one of its leading subsidiaries, Global Infrastructure Partners, announced its majority-stake takeover of CK Hutchison in March, adding that the deal would exclude the holding company’s operations in China and Hong Kong.
This is despite Hutchison being headquartered in the city state.
If the MSC consortium succeeds in acquiring the lion’s share of one of the terminal conglomerate’s operations, it will secure 80% of Hutchison’s holdings, or 41 of its 43 ports.
In its latest Cargo Movement Update, the South African Association of Freight Forwarders and Business Unity SA describes the development as representing a fundamental shift in the global terminal operator landscape.
It will entail MSC “rising to dominance through aggressive acquisitions”, the custodial bodies said.
“If MSC’s bid for Hutchison succeeds, it will become the world’s largest terminal operator, intensifying competition and raising equity concerns for independent players.”
However, timing is of the essence, especially in view of what’s happening in the Middle East and the current tariff stand-off between the US and China.
Various supply chain news outlets from developed economies have reported that Chinese regulators continue to review the deal closely, expressing concerns, especially about the Panama Canal terminals.
Beijing’s opposition has led to talks of including Chinese state-owned Cosco in the consortium to ease geopolitical tensions.
The Panama Canal Authority is also conducting an audit of the port concessions, and its administrator has publicly raised concerns about the potential threat to the canal’s neutrality if the deal proceeds as currently structured.
Meanwhile the consortium is in a race against time, as exclusivity on the negotiations is set to expire in late July. – Assisted by various sources.
