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It has been a busy fortnight for the US Federal Maritime Commission (FMC), having slapped ...
MSC’s continued pursuit to acquire the international port portfolio of Hutchison took a further twist at the weekend when it emerged that Chinese interests are in talks to join the TiL/BlackRock consortium.
According to Bloomberg, the proposed $22bn acquisition of an 80% stake in Hutchison by MSC subsidiary TiL and BlackRock became a negotiating point during the recent high-level talks between US and Chinese officials in Geneva.
Following the talks, President Trump claimed the two countries had “done a deal” on US tariffs and Chinese rare earth exports.
However, according to Bloomberg, adding China state-owned carrier and port operator Cosco to the TiL/BlackRock consortium was also discussed, as a way of overcoming Chinese government objections to the acquisition.
While it remains unclear exactly what legal authority Beijing has over the sale of Hutchison assets outside its jurisdiction, a Chinese foreign ministry spokesman recently emphasised to media: “Since March, relevant departments have issued multiple statements emphasising that any transaction involving the sales of ports by CK Hutchison Holdings will be subject to lawful review, in order to safeguard fair market competition and protect the public interest.
“All parties involved in the transaction must not circumvent review by any means, and implementation of the transaction is prohibited prior to obtaining approval. Violations will entail legal consequences. We hope the enterprises concerned remain clear-headed and act with prudence,” he added.
The addition of Cosco may also go some way to alleviating potential competition concerns which already appear to be proving to be one of the obstacles to the acquisition’s completion.
Last week, Panama Canal Authority administrator Ricaurte Vasquez revealed the country’s concerns over having one carrier control both a significant amount of shipping capacity going through the waterway, and operating terminals on both Pacific and Atlantic coasts, rather than the common-user model that Hutchison operates.
“If there is a significant level of concentration in terminal operators belonging to an integrated company or a single shipping company, it will be at the expense of Panama’s competitiveness in the market and the alteration of the principle of infrastructure neutrality between nations,” the UK Financial Times quoted him as saying.
However, in the particular case of Hutchison’s 90% ownership of Panama Ports Company (PPC), Drewry ports and terminals analyst Eirik Hooper said BlackRock was expected to take a 51% stake in PPC, with MSC the remaining 49%.
With the rest of Hutchison’s non-Chinese assets, MSC would be buying the equity, Mr Hooper said.
Negotiations between Hutchison and the consortium are set to run until 17 July, and if the deal completes in the current from it would give MSC a 15% global share of the container terminal sector.
Meanwhile, the weekend also saw the German hub port of Hamburg festooned in MSC’s bright yellow livery, as the carrier held a festival for the city’s residents to mark its entry to the port following its partial acquisition of HHLA., and included the launch of its latest newbuild, the MSC Germany.
An alternative view came from one of The Loadstar’s offspring visiting the city at the same time:
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