According to reports, the Italian shipping giant Aponte family’s Mediterranean Shipping Company (MSC) is discussing the possibility of excluding the Panama ports from the deal to acquire ports from the Yangtze and Hutchison Port Holdings.
Due to the ongoing trade tensions between the U.S. and China, geopolitical disputes surrounding the Panama ports have hindered the port deal between MSC-BlackRock and Yangtze and Hutchison, with the deal totaling up to $22.8 billion.
The Wall Street Journal reported on Wednesday, citing sources familiar with the matter, that Gianluigi Aponte and his son Diego Aponte, who control MSC, have discussed separating the Panama ports from the main transaction involving port terminals in 41 docks across five continents and two disputed ports along the Panama Canal.
The deal is currently caught in the crossfire of political and trade disputes between the United States and China. The Aponte family is collaborating with the American asset management company BlackRock to advance the deal with Yangtze and Hutchison.
Sources mentioned that negotiations are proceeding simultaneously, and if the Panama ports deal is split, a new agreement between the parties will ultimately be needed. The MSC-BlackRock consortium is currently in an exclusive 145-day negotiation window with Yangtze and Hutchison, and a final agreement has not been signed yet.
Larry Fink, CEO of BlackRock, stated last week that the deal is still being viewed as a single transaction including the Panama ports.
Reports suggest that the global portion of the deal may be completed within three to six months, but the Panama part may take up to a year to finalize.
Initially, the deal involved Terminal Investment Limited (Til), owned by the Aponte family, acquiring a 51% stake in port assets from 41 ports excluding those in the Panama Canal, with the remaining 49% going to an entity under BlackRock. These stakes comprise the majority of the deal assets, including container terminals in the Netherlands, Germany, Malaysia, and other regions.
However, ownership of the two controversial ports in Panama will be swapped: 49% to TiL and 51% to Global Infrastructure Partners (GIP), recently acquired by BlackRock.
Beijing has consistently opposed Hutchison’s sale of its two ports in Panama. Additionally, there have been accusations of low concession payments by Hutchison in Panama. These factors have contributed to the delay in signing the deal as initially planned on April 2.
Sources cited by the Wall Street Journal indicate that the Chinese government has informed Hutchison and TiL that selling the 41 global ports excluding those in Panama is unlikely to be an issue, although the deal will still face regulatory reviews from other countries.
Beijing has been pressuring Li Ka-shing on the operation of the Panama ports through Hutchison and has used media resources and public opinion to exert influence.
Similarly, U.S. President Trump mentioned on Tuesday regarding the operation rights of the Panama Canal, expressing his disapproval of Beijing’s control in the region and hinting that trade partners may need to make choices between the U.S. and China.
Trump noted that when he visited the canal a year ago, “almost every flag and every statement was written in Chinese.”
“We said, we didn’t give the Panama Canal to the Chinese. We gave it to Panama. We shouldn’t have given the canal to the Panamanians,” the President stated. “We are now working with Panama on this. We will decide how to handle it.”
It is reported that the Aponte family and the Li Ka-shing family have a long-standing relationship. Sources mentioned by the Wall Street Journal stated that 84-year-old Gianluigi was the one who initiated the port deal negotiations with the 96-year-old Li Ka-shing. Li Ka-shing’s family controls Hutchison.
Before the canal dispute erupted, the two had informal discussions regarding Hutchison’s port assets. They had also met several times in Italy and Hong Kong, and Li Ka-shing’s family had visited the Aponte family’s resort near Naples.
This deal will position the Aponte Group not only as the world’s largest container ship owner but also as one of the largest port operators globally.