An investor group backed by BlackRock has agreed to buy a majority stake in the Hong Kong-based company that runs ports along either side of the Panama Canal, giving a US firm control of key docks.
The agreement comes following pressure from the White House to take control from China.
The $22.8 billion (AED 83.7 billion) sale by Hong Kong's CK Hutchison to US and Swiss investors also includes dozens of ports in other countries, the companies announced Tuesday. The move appears to be a win for US President Donald Trump's aggressive diplomacy just hours before he is due to tout the successes of the first six tumultuous weeks of his second term in an address to the US Congress.
He vowed to take control of the strategic canal connecting the Atlantic and Pacific Oceans during his January 20 inauguration speech, falsely claiming China is operating it. The transaction appears to hand command of the vital docks on both entrances of the canal to US interests.
Trump refused to rule out military action to assert US control over the canal, which is operated by the Panama Canal Authority, an autonomous agency overseen by the Panamanian government, and surrounded by several ports.
The US president has complained about the presence of Chinese and Hong Kong-based companies in Panama, and American officials and politicians have said CK Hutchison's control of the ports represents a security risk for the operation.
Last year, about 12,000 ships used the canal, which connects 1,920 ports across 170 countries. But its position is strategic for Washington as over three-quarters of all vessels passing through the canal originate in or are bound for the US.
The sale of licenses will result in the consortium gaining a 90 per cent stake in Panama Ports Company, which has been the operator of the Balboa and Cristobal ports in the Central American country for more than two decades, CK Hutchison said in a statement.
BlackRock, the world's largest asset management firm based in New York, has briefed the White House and congressional leadership on the deal, a person familiar with the transaction said.
This would be BlackRock's largest infrastructure investment to date, that person said.
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