MSC-Blackrock agree US$22.8 billion deal for Hutchison Ports international operations

MSC subsidiary Terminal Investment Limited (TiL) and global investment company Blackrock have agreed a US$22.8 billion agreement to acquire the international port and terminal operations of Hong Kong-listed CK Hutchison, the parent company of Hutchison Ports.

In a deal that, when finalised, most likely next year, will see MSC vault to the top of the terminal operators list with a strong presence in key regions in Asia and Europe, and also notably for Trump, two terminals at either end of the Panama Canal.

Former shipping analyst Mark McVicar told Container News, however: “The decision by Hutchison to sell all its international ports and terminals, excluding those in China, was clearly not a decision made recently, so not a reaction to Trump’s concerns about China’s influence over the Panama Canal.”

The consortium has reached a preliminary agreement of the terms of the transaction and the TiL/Blackrock consortium now has 145 days to negotiate the final agreement exclusively.

If the deal is finalised, it will see TiL leapfrog its competitors from seventh in Drewry’s equity adjusted throughput charts to first, with a combined total volume of over 78 million TEUs, with Hutchison port’s international volumes at 36 million TEUs and TiL at 43.2 million TEUs.

Eleanor Hadland, Drewry Shipping Consultant’s ports and terminals analyst, said: “This deal will put MSC and TiL in a dominant position in the Hamburg-Le Havre range with its recent deal HHLA deal, its Rotterdam terminals and its dominant position in Antwerp and Le Havre.”

MSC agreed to acquire 49% stake in German port operator HHLA, which operates three out of four major Hamburg terminals last year.

Hadland, however, believes there will be some adjustments made, including divestments of some existing terminal operations controlled by MSC, as local competition authorities analyse the extent of the carrier’s dominance in some regions.

One such divestment may come in Panama where MSC has invested in the Port of Rodman on the Pacific end of the Panama Canal, with Hutchison having concessions in Balboa, on the Pacific, and Cristobal on the Caribbean side of the canal.

According to Drewry, MSC’s interest in the HHLA agreement was largely because of the port’s intermodal network.

“It is important to secure capacity at key ports because it gives the company leverage on the investment in ports and their inland networks, particularly with the growing importance of moving towards net zero operations,” said Hadland.

The deal with Blackrock saw the investor buy Global Infrastructure Partners (GIP), in the autumn of last year, GIP is a 20% stakeholder in TiL, which in turn is 70% owned by MSC, the remaining shares are held by GIC, a Singapore wealth fund.

McVicar believes the decision by CK Hutchison to sell its international ports business was not a surprise, with the company seeing the terminals business as a cash cow, with little investment over the past 10 years.

Moreover, a port source said that Hutchison Ports operations were less integrated than other global terminal operators, with each unit standing alone. “Hutchison Ports were treading water for 10 years, only grew organically, you could see there was a level of disinterest in the portfolio,” said the source, concluding, “They were not as dynamic as DP World, PSA and APM Terminals.”

Mary Anne Evans
Correspondent at Large

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