CK Hutchison Holdings Ltd. saw its shares decline sharply following reports that Hong Kong billionaire Li Ka-shing may delay signing a deal to sell the company’s Panama Canal ports to a consortium led by BlackRock Inc.
Shares of the conglomerate fell as much as 4.7% on Monday, marking their biggest drop since March 18. The decline has trimmed the company’s year-to-date gains to 5.5%, compared to the Hang Seng Index’s 16% rise.
The potential delay comes amid increasing pressure from Beijing, which has expressed strong opposition to the $19 billion sale of 43 global ports, including the Panama facilities. While US officials have framed the deal as a strategic move to limit Chinese influence over a critical global trade route, Beijing views it as a threat to its shipping and economic interests.
Chinese authorities have warned against the sale, with state media intensifying criticism. On Saturday, China’s Hong Kong and Macau Affairs Office reposted an editorial from pro-Beijing newspaper Ta Kung Pao, urging CK Hutchison to halt the transaction, cautioning that failure to do so could have serious consequences.
The uncertainty surrounding the deal has led to market volatility, with CK Hutchison’s stock losing nearly 13% in value since March 13, when Chinese state media first criticized the sale. The company’s market capitalization has dropped by approximately HK$24.3 billion (US$3.1 billion) during this period.
China’s market regulator has also announced plans to conduct an antitrust review of the transaction, citing the need to protect fair competition and the public interest.
Despite these challenges, the sale process remains ongoing, with negotiations set to continue under an exclusivity agreement until July 27. Some analysts expect further delays due to geopolitical concerns but anticipate that CK Hutchison will work to address regulatory and diplomatic issues before finalizing the deal.
JPMorgan analysts noted:
“We are not surprised by the potential delay due to rising geopolitical implications. CK Hutchison will likely seek to resolve conflicts with various stakeholders before confirming the deal, and we won’t be surprised if that date is extended further.”
The Panama Canal ports, operated by a CK Hutchison unit, are among the busiest in the region, handling approximately 3% of global maritime trade. The company has managed these facilities since 1998, with its concession extended for another 25 years in 2021.
