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Shares in Hong Kong-based conglomerate CK Hutchison fell 5 per cent on Friday after China criticised the sale of its Panama Canal ports and said it should “think twice” about the $22.8bn deal with US asset manager BlackRock.
A strongly worded commentary, which attacked the US for pressuring the deal “through despicable means”, first appeared in Beijing-backed newspaper Ta Kung Pao in Hong Kong and was republished by China’s top office for the territory’s affairs late on Thursday.
“[Critics] say this is a spineless, grovelling, profit-seeking move that sells one’s integrity for personal gains, and an act that disregards national interests . . . [which] betrays and sells out all Chinese people,” said the opinion piece.
China’s shipping and trade would be curbed by the US, it asserted, and CK Hutchison should “think twice” about “what position and side they should be on”.
Concerns over whether the deal would be completed after it received a nod from the Trump administration were reflected in Friday’s share price fall, though the move could be an “overreaction”, said Dan Baker, a senior equity analyst at Morningstar.
“To the extent that the company still has assets in China, if the Chinese government is upset with them for making this sale, there is probably some potential investor concern about what might happen to their businesses that are still there,” he said.
Mainland China and Hong Kong accounted for nearly 14 per cent of CK Hutchison’s 2023 revenues, compared with about 50 per cent from the UK and Europe.
CK Hutchison did not immediately respond to a request for comment. Its shares had jumped more than 20 per cent in Hong Kong when the deal was first announced last week.
At the time, China’s foreign ministry spokesperson Lin Jian declined to comment on the sale, although he denied Trump’s claims that China controlled the canal.
Under an in-principle agreement, 43 ports owned by billionaire Li Ka-shing’s CK Hutchison, including two at either end of the Panama Canal, will be sold to a consortium including BlackRock.
The ports include those in the UK and Germany, as well as south-east Asia, the Middle East, Mexico and Australia.
BlackRock chief executive Larry Fink briefed senior officials in the Trump administration, including the president and state secretary Marco Rubio, to secure their backing for the takeover, the Financial Times reported.
The deal was mapped out within days of Donald Trump taking office. The president had said in his inaugural address: “China is operating the Panama Canal . . . and we’re taking it back.”
Li, who retired as chair of CK Hutchison in 2018 and remains a senior adviser, had been actively involved in the negotiations.
