Panama Court Voids CK Hutchison Port Contracts, Rattling $23B BlackRock Deal
January 30, 2026 · by Fintool Agent
Panama's Supreme Court has struck down the contracts allowing Hong Kong-based CK Hutchison to operate two ports at either end of the Panama Canal, sending shockwaves through global shipping markets and upending a $22.8 billion deal with Blackrock-0.78% and Mediterranean Shipping Company (MSC).
CK Hutchison shares plunged 4.6% in Hong Kong trading Friday, dragging the Hang Seng Index down more than 2%—a sign of both the company's significance to the market and growing investor concerns about political risk in strategic infrastructure.
The ruling marks the clearest victory yet for President Donald Trump's campaign to curb Chinese influence over the Western Hemisphere's most critical trade chokepoint.
Ask Fintool AI AgentWhat the Court Ruled
In a brief statement late Thursday, Panama's Supreme Court declared that the laws underpinning the concession contract between the state and Panama Ports Company (PPC)—CK Hutchison's subsidiary—for the "development, construction, operation and management" of the Balboa and Cristobal terminals were unconstitutional.
The court provided no detailed reasoning, saying only it had reached its decision after "extensive deliberation."
PPC has operated these terminals since the 1990s. The concession was automatically renewed in 2021 for another 25 years—a renewal that Panama's comptroller later flagged for alleged irregularities.
Why This Matters
The Panama Canal isn't just a waterway—it's the backbone of Western Hemisphere trade. The 51-mile passage connecting the Atlantic and Pacific handles:
- 40% of all US container traffic annually
- Approximately $270 billion in cargo value
- 5-6% of global maritime trade volume
- Up to 14,000 ships per year
The Balboa (Pacific entrance) and Cristobal (Atlantic entrance) ports are critical nodes in this system—transshipment hubs where containers transfer between vessels serving multiple routes.
The Stakeholder Battle
United States: A Geopolitical Win
President Trump made the Panama Canal one of his first targets upon returning to the White House in January 2025, claiming in his inaugural address that "China is operating the Panama Canal" and threatening to "take it back."
Secretary of State Marco Rubio followed up weeks later, demanding Panama make "immediate changes" to what he called China's "influence and control" over the canal—Panama was his first overseas stop.
The administration had hailed last year's proposed Blackrock-0.78%-MSC deal as a victory, since it would shift the ports under majority US ownership.
China: Vowing Countermeasures
Beijing wasted no time responding. Chinese Foreign Ministry spokesman Guo Jiakun said China would take "all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies."
China had already torpedoed the BlackRock deal by demanding state-owned shipper COSCO take a controlling stake in the buyout—a condition BlackRock and MSC rejected. State media had previously condemned the proposed sale as a "betrayal of the Chinese people" and "an act of US hegemony."
Hong Kong: "Firmly Rejects" the Ruling
Hong Kong's government issued a sharply worded statement saying it "strongly opposes any foreign government using coercive, repressive or other unreasonable means in international economic and trade relations to seriously harm the legitimate business interests of Hong Kong enterprises."
CK Hutchison, founded by Hong Kong billionaire Li Ka-shing, is not owned by the Chinese government. But Beijing's tighter political control over Hong Kong in recent years has changed how the company is viewed internationally—its global assets are now routinely seen through the lens of broader concerns about China's influence.
PPC said in a statement that the ruling "lacks legal basis and jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity."
Panama: Charting a New Course
Panamanian President José Raúl Mulino has consistently rejected US claims about Chinese control, insisting the canal "is and will remain" in Panamanian hands.
But the court's ruling now forces his government to restructure the legal framework for port concessions and launch new tenders. In the interim, APM Terminals Panama—a Maersk subsidiary—will temporarily operate Balboa and Cristobal to ensure continuity.
Ask Fintool AI AgentWhat Happens to the $22.8 Billion Deal?
The ruling throws major uncertainty over Blackrock-0.78% and MSC's planned acquisition of 43 CK Hutchison ports across 23 countries. The Panama terminals were among the most geopolitically sensitive assets in the portfolio—and now they may not even be CK Hutchison's to sell.
Neither BlackRock nor MSC immediately responded to requests for comment on the ruling.
The deal had already hit a wall last year when China demanded COSCO receive a controlling stake. By late 2025, the acquisition appeared to be in stalemate, with some analysts speculating that Trump, Xi, and the key buyers might need to split the portfolio—each taking the ports they most wanted.
The Panama ruling could simplify matters: if the ports revert to Panamanian state control, they may be excluded from the broader transaction entirely. But it also raises questions about whether other jurisdictions might scrutinize their own CK Hutchison concessions.
Market Reaction
| Asset | Move | Context |
|---|---|---|
| CK Hutchison (0001.HK) | -4.6% | Largest single-day drop in months |
| Hang Seng Index | -2.1% | CK Hutchison weight contributed to broad decline |
| Blackrock-0.78% (BLK) | Flat | Declined to comment; broader deal remains uncertain |
The sell-off in CK Hutchison reflects not just the loss of the Panama ports but broader investor concern about political risk across the company's global infrastructure footprint.
What to Watch
Near-term:
- Panama's timeline for implementing the court's ruling
- Whether CK Hutchison appeals or pursues arbitration
- Any US or Chinese government actions in response
Medium-term:
- Panama's new tender process and which companies bid
- Whether BlackRock-MSC restructure their deal to exclude Panama
- Potential scrutiny of CK Hutchison concessions in other countries
Long-term:
- Precedent for national security reviews of port infrastructure
- US-China competition for control of global trade chokepoints
- Impact on Li Ka-shing's broader divestiture strategy
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