China threatens to squash Panama ports deal unless its shipping giant gets an equal stake: report
The deal, valued at around $20 billion, hands over more than 40 global ports owned by Hong Kong business magnate Li Ka-Shing to US asset manager BlackRock and Mediterranean Shipping Company.
China is demanding that Cosco, its largest shipping firm, be an equal partner to BlackRock and MSC in the deal, sources familiar with the matter told the Wall Street Journal.
A Cosco Shipping container freighter in the Port of Hamburg.
ZUMAPRESS.com
BlackRock, MSC and Li's firm, CK Hutchison, are all open to that idea, sources said.
MSC, Cosco and the Chinese Embassy did not immediately respond to The Post's requests for comment. BlackRock declined to comment.
The firms are currently staring down a July 27 deadline, when exclusive talks between the three partners will end and Cosco can be added to the deal.
But that change will likely anger President Trump, who has viewed the deal as a national security win as he argues that the US needs to 'take back' the waterway.
Chinese officials, meanwhile, have told Chinese state-owned companies to freeze any incoming deals with Hutchison or other businesses linked to Li, sources told the Journal.
The inclusion of Cosco emerged as a way to nudge the deal forward following intense US-China trade talks in Switzerland, Bloomberg reported last month.
A view of the Panama City skyline and Balboa port.
Nicola78/Wirestock Creators – stock.adobe.com
Chinese authorities have told BlackRock, MSC and Hutchison that without Cosco's inclusion in the deal, Beijing will take steps to block the sale, sources said.
And the firms involved in the deal can't afford to burn bridges with China.
BlackRock and Hutchison both have interests in the nation, and MSC is one of the largest shippers of Chinese exports in the world.
Italian billionaire Gianluigi Aponte's family-run business, MSC, has emerged as the lead investor in the deal, though BlackRock is notably expected to take over the two key Panama ports included in the sale.
The deal is expected to position MSC as the world's largest terminal operator.
It wouldn't be the first time China has squashed such a deal.
In 2014, it blocked a major shipping alliance between MSC, Denmark's AP Moeller-Maersk and France's CMA CGM.
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