President Trump has been bashing Panama on his most valuable asset, the Panama Canal for weeks. It seemed that Panama could not drive Washington out of his back.
Wall Street intervened on Tuesday.
The investment group led by giant American assets manager BlackRock said it has agreed to buy two ports in Panama, owned by a Hong Kong company that has become the focus of tensions between Panama and Trump.
BlackRock will buy the port at either end of the canal, with over 40 people buying it from Hong Kong conglomerate CK Hutchison for around $19 billion. Trump has other complaints about the canal, but it has made too many charges, he argues — the deal has greatly reduced pressure on Panama, political analysts said.
“We've been working hard to get the better of our customers,” said Benjamin Gedan, director of the Latin American Program at Wilson Center.
The deal is also a sign of loot available to American companies as the Trump administration pursues America's first foreign policy. And for some historians, it brings memories of the oversized power that Wall Street banks had in Latin America.
“Where is the voice of Panama?” Peter James Hudson, an associate professor at the University of British Columbia, said he was the author of “Banks and Empire: How Wall Street Colonized the Caribbean.” “They are completely lost in this bigger story of Trump's efforts.”
For BlackRock, it is the latest indication of its desire to expand beyond what is historically known. It manages trillions of dollars for everyday investors in equities and bond funds. BlackRock purchases ports through Global Infrastructure Partner, an investment company that purchased for around $13 billion last year, which owns and operates many ports, airports and data centers.
Conversations with CK Hutchinson's BlackRock-led consortium owned by Asia's wealthiest Li family and CK Hutchinson executives began a few weeks ago, according to those familiar with the discussion.
The Li family believed that withdrawing port operations, particularly the Panama Canal holdings, was subject to political pressure, the person said.
The Panama Canal offers important shortcuts connecting the Pacific and Atlantic oceans. The vessels do not need to be stopped at Panama's port to pass through the canal.
Trump frequently says he hopes to seize the US to take control of the waterway that he handed over to Panama in 2000.
CK Hutchison has operated the Port of Balboa and Cristobal since 1997, when Panama granted 25 years of concession to the facility. The concessions were renewed for another 25 years in 2021. The BlackRock Investment Group buys companies that own port concessions.
Over the past few days, BlackRock executives and board member Adebayo Ogunley, including CEO Lawrence D. Fink, explained to Trump. Treasury Secretary Scott Bescent; Secretary of State Marco Rubio. According to two people involved in the transaction, the others are others in the transaction. The administration was supportive, they added.
The Li family especially sought American buyers, said one of those who were explained about the discussion. There were three other bids for the deal, said another person familiar with the deal.
CK Hutchison co-management superintendent Frank Sixt said in a statement that the deal was “purely commercial and has absolutely nothing to do with recent political coverage of the Port of Panama.”
This is BlackRock's biggest infrastructure deal. We have contracted with a partner known as Terminal Investment Limited. It operates a port provided by Mediterranean shipping, the world's largest container carrier company.
The deal added to the portfolio of port investments in Europe and Latin America, and in addition to the Panama Canal operating port, buyers were particularly interested in the ports of CK Hutchison in Asia.
“These world-class ports will drive global growth,” Fink said in a statement.
The deal also shows how Oganresi, the central man, has turned to BlackRock. After BlackRock acquired Global Industrial Partner (GIP), Ogunlesi became the company's largest individual shareholder. He sits separately on the Board of Directors of Terminal Investment Limited.
“BlackRock could not have done GIP without GIP and without BlackRock,” said Ralph Schlosstein, Evercore's Chairman of Investment Bank Evercore and co-founder of BlackRock. “The connectivity that Larry has with public sector leaders around the world and the ability Bayo brings to the table is an attractive combination.”
The Trump administration's support for BlackRock-led deals to buy these ports comes after Fink and the company have been targeted by many conservative lawmakers and politicians in his past comments urging businesses to consider environmental, social, governance or ESG goals. More recently, especially in recent weeks, BlackRock has retreated from the ESG and Diversity initiatives.
CK Hutchison is part of a conglomerate founded by Li Ka-Shing, who at one point was Hong Kong's wealthiest man. Lee retired in 2018 and handed over control to his son Victor Lee. The conglomerates include retail chains, communications networks and energy companies.
Trump is also aiming to charge the Panama Canal bills shipping companies to use the waterways. Fees have risen in recent years, but the Panama agency that operates the canal says drought, investment in upgrades and demand are responsible for the rise.
The port concession awarded to CK Hutchinson in 2021 was recently challenged in a Panama court by two lawyers who argued that the concession was unconstitutional. The lawsuit prompted speculation that the Panama lawyers behind the challenge were acting as the frontline for other entities facing profits from CK Hutchison's expulsion. However, one of the lawyers, Norman Castro, emailed that he and the other lawyers act strictly in their personal abilities and do not respect the country's constitution.
Panama officials have pledged to conduct an audit to ensure that Hutchison “is properly reporting revenue, payments and contributions to the state.” On January 21st, almost 12 auditors entered the company's office and began work.
