CK Hutchison Holdings, the Hong Kong conglomerate controlled by billionaire Li Ka-shing, has agreed to sell a 90% stake in its Panama Canal ports to a consortium led by BlackRock. The deal comes after US President Donald Trump raised concerns about perceived Chinese influence over the strategic waterway.

The sale includes the ports of Balboa and Cristobal, located at the Pacific and Atlantic ends of the Panama Canal respectively. CK Hutchison has operated these ports for almost three decades, making it the largest port operator by market share at the canal, which handles about 5% of global trade annually.

The transaction also involves CK Hutchison divesting an 80% interest in Hutchison Ports, which operates 43 ports across 23 countries. The total deal is valued at $22.8 billion and will generate over $19 billion in cash proceeds for the company if finalized.

Following the announcement, CK Hutchison's shares surged almost 22% on the Hong Kong stock exchange, boosting its market capitalization to HK$180.4 billion ($23.2 billion). The buying consortium includes BlackRock, its Global Infrastructure Partners unit, and Terminal Investment, the port division of Swiss billionaire Gianluigi Aponte's shipping company MSC.

The deal unfolds as China continues expanding its global financial influence elsewhere, recently extending a $2 billion loan to Pakistan. China remains Pakistan's largest creditor with loans totaling almost $29 billion, representing 22% of Pakistan's $130.85 billion external debt, according to the World Bank's International Debt Report.

The deal comes amid political tensions after Trump threatened in December to reassert US control over the Panama Canal. Trump has accused Panama of charging excessive rates to the US, the canal's biggest user, and claimed that Panama had given control of the waterway to China—allegations denied by both China and Panama.

During a joint address to Congress on Tuesday, Trump referenced the situation directly:

• He declared the Panama Canal "was built by Americans for Americans"
• He claimed the 1977 US-Panama treaty had been "violated very severely"
• He stated "We didn't give it to China. We gave it to Panama and we're taking it back"

Despite these political overtones, CK Hutchison co-managing director Frank Sixt maintained that the transaction "is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports." Bloomberg Intelligence analyst Denise Wong noted that "the deal will remove business uncertainty for CK Hutchison."

Ports operations generated 20% of CK Hutchison's earnings before interest and taxes in the first half of 2024, making it the company's third-biggest business. During this period, 82% of the company's port revenue came from operations outside mainland China and Hong Kong.