CMA CGM shows interest in CK Hutchison port terminals

CK Hutchison had previously entered exclusive talks with a consortium consisting of BlackRock’s Global Infrastructure Partners (GIP) and MSC’s terminal-operating arm, Terminal Investment Ltd (TIL), to transfer its 80% effective controlling interest in subsidiary and affiliated companies. These entities collectively own, operate and develop 43 ports with 199 berths across 23 countries.

The preliminary agreement, valued at US$22.8Bn, also included Hutchison Port Holdings’ 90% stake in Panama Ports Co, which operates the ports of Balboa and Cristobal along the Panama Canal.

CMA CGM joins the race

However, following China’s strong criticism of the deal, the deadline for the exclusive talks ended on 27 July, opening the door for other interest parties. CMA CGM appears to be one of them.

"It’s very important for the industry, and it’s important for us as a major player in this sector," the company’s chief financial officer Ramon Fernandez told reporters during the disclosure of its Q2 earnings results. "We are present in 65 terminals around the world so we are following this operation very closely and are naturally interested in participating," he added.

Geopolitical chess game

Following the end of the exclusivity period, CK Hutchison announced this week it was in discussions with the consortium to include a Chinese "major strategic investor" in the bid. Several shipping sources have identified Chinese shipping giant COSCO as the potential investor.

The deal has faced significant backlash from China, which condemned it as "an act of hegemony by the US."

This opposition followed remarks made by Donald Trump during his inaugural speech as President, in which he claimed that Beijing controls the Panama Canal and vowed that the United States would take it back.

The intensifying geopolitical tensions had raised market speculation that the deal involving BlackRock’s Global Infrastructure Partners and MSC could ultimately fall through.

Drewry senior manager for container research Simon Heaney told Riviera earlier this year the transaction would face several global competition hurdles. “With the Chinese government clearly not thrilled by the agreement, a lot can happen before it becomes official,” he cautioned.