Analysis: DSV CEO Jens Lund at a crossroads – next deal, please!
On borrowed time
Tomorrow’s deadline for CK Hutchison to sell its 90% stake in Panama Ports Company (PPC) to the BackRock-Terminal Investment (TiL) consortium is expected to be missed, as the political fall-out from the deal continues.
The sale of PPC was, effectively, separated from the main $22bn deal to acquire an 80% stake in Hutchison’s global portfolio, because at the time it was announced, the Panamanian government was investigating the legitimacy of PPC’s concession agreement, which was extended for a 25-year period in 2021.
However, since the deal was announced, on 4 March, there appears to be growing anger in Beijing that it was not consulted about the sale, and it has also seen its influence in Central America eroded in the face of President Trump’s very public criticisms about its supposed “control” over the Panama Canal ,via Hutchison’s operation of the ports of Balboa and Cristobal.
China’s Anti-Monopoly Department in the State Administration for Market Regulation (SAMR) said: “We note that this transaction will be reviewed in accordance with the law to protect fair competition in the market and safeguard the public interest.”
It further noted that SAMR’s remit included “investigating and dealing with cases of concentration of undertakings that are illegally carried out, and cases of concentration of undertakings that do not meet the reporting standards but may eliminate or restrict competition”… and “guiding enterprises in anti-monopoly response and compliance work abroad”.
A Reuters report from Hong Kong quoted an unnamed CK Hutchison source as saying the PPC negotiations were taking longer than expected “for obvious reasons”, but insisted that negotiations continued.
Meanwhile, last week Bloomberg reported that Beijing had also ordered its state-owned enterprises to refrain from doing any new business with any part of the CK Hutchison group, which also includes telecoms and property subsidiaries.
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