The proposed $23 billion acquisition of the majority of Hutchison Ports’ international terminal operations by Mediterranean Shipping Company and BlackRock may collapse unless significant changes are made to the deal’s structure.
According to the South China Morning Post, competition authorities from Panama and China have raised concerns over the current arrangement, indicating that substantial revisions will be necessary.
Regulatory scrutiny of the acquisition by MSC subsidiary Terminal Investment Limited of CK Hutchison’s non-Chinese terminals will need to be rigorous in each jurisdiction, Seatrade Maritime reports.
Industry experts acknowledge that the carrier is likely to be required to divest itself of some terminals around the world to comply with antitrust regulations.
MSC, in partnership with investment firm BlackRock, submitted a joint bid worth $22.8 billion in March. The offer includes 43 terminals with a total of 199 berths globally.
Included in the deal are the key ports of Balboa and Cristobal at either end of the Panama Canal, and Hong Kong-listed company CK Hutchison has stated that MSC is leading the bid.
Ricaurte Vásquez, administrator of the Panama Canal Authority, has warned that “there is a potential risk of capacity concentration if the deal proceeds as currently structured”.
“Should there be significant concentration of terminal operations under one integrated or single shipping company, it would undermine Panama’s competitiveness and breach the principle of neutrality.”
Panama’s neutrality could prove a pivotal issue, particularly for MSC’s rivals in both the container shipping and terminal sectors.
