Shares in Hong Kong-based conglomerate CK Hutchison fell 5% on Friday after China criticized the sale of its Panama Canal ports and suggested it should “think twice” about a $22.8 billion deal with US asset manager BlackRock.
A strongly worded commentary, which first appeared in Hong Kong’s Beijing-backed newspaper Ta Kung Pao and was reposted late Thursday by China’s top office in charge of the territory’s affairs, accused the US of using “despicable means” to pressure the deal.
The article stated, “[Critics] say this is a spineless, fawning, profit-seeking move that sells out integrity for personal gains and disregards national interests. [It is an act of betraying and selling out all the Chinese people].”
It emphasized that China’s maritime transport and trade would be hindered by the US and that CK Hutchison should “think twice” about “what position and side it should be on.”
Dan Baker, a senior equity analyst at Morningstar, said concerns over whether the deal would be completed after securing approval from the Trump administration were reflected in Friday’s share price decline, but that the move might be an “overreaction.”
“To the extent that the company still has assets in China, if the Chinese government is angry with them for making this sale, there is probably some potential investor concern about what might happen to their businesses that are still there,” Baker said.
Mainland China and Hong Kong accounted for about 14% of CK Hutchison’s 2023 revenues, while revenues from the UK and Europe accounted for about 50% of that.
CK Hutchison did not immediately respond to a request for comment. Its shares had risen more than 20% in Hong Kong when the deal was first announced last week.
At the time, Chinese Foreign Ministry Spokesperson Lin Jian declined to comment on the sale but denied Trump’s claims that China controlled the canal.
Under the agreement in principle, 43 ports owned by billionaire Li Ka-shing’s CK Hutchison company, located at both ends of the Panama Canal, will be sold to a consortium that includes BlackRock.
These ports include those in the UK and Germany, as well as Southeast Asia, the Middle East, Mexico, and Australia.
According to the Financial Times, BlackRock CEO Larry Fink briefed senior officials from the Trump administration, including the President and Secretary of State Marco Rubio, to secure their support for the takeover.
The deal was planned a few days after Donald Trump took office. The President said in his inaugural speech: “The Panama Canal is operated by China… and we are taking it back.”
Li, who retired as chairman of CK Hutchison in 2018 and still serves as a senior advisor, was actively involved in the negotiations.
