Did BlackRock Buy the Panama Canal? We Explain.
Chinese-chartered merchant ship Cosco Shipping Panama crosses the new Agua Clara Locks during the inauguration of the expansion of the Panama Canal in Colon, 80 km from Panama City on June 26, 2016. A giant Chinese-chartered freighter nudged its way into the expanded Panama Canal on Sunday to mark the completion of nearly a decade of work forecast to boost global trade. / AFP / RODRIGO ARANGUA (Photo credit should read RODRIGO ARANGUA/AFP via Getty Images)
News in the past days have hailed BlackRock, an American multinational investment company, as the new owner of the Panama Canal, with multiple articles and TikToks claiming BlackRock has bought the waterway. But did BlackRock buy the Panama Canal? What exactly did they purchase? We explain.
BlackRock has not bought the Panama Canal or any controlling interest in the waterway. The Panama Canal is controlled by the Panama Canal Authority, which is an autonomous entity of the government of Panama. Therefore, the Canal or any parts of it are not for sale. What BlackRock has entered into a preliminary deal is to buy the ports business previously held by Hong Kong conglomerate CK Hutchison, including ports at both ends of the Canal, in Balboa and Cristobal.
In addition, buying the ports does not equal buying the physical entrances to the Panama Canal. The ports handle cargo. The Panama Canal facilitates the passage through the Canal. And the Hong Kong conglomerate CK Hutchison won the right to operate the Panama Ports company after participating in a public tender in Panama in 1997, while the Canal was still technically under U.S. control.
“My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Trump told the U.S. Congress on Tuesday night (March 4). “Just today, a large American company announced they are buying both ports around the Panama Canal and lots of other things having to do with the Panama Canal and a couple of other canals.”
However, Panamanian President Jose Raul Mulino pushed back against Trump saying, “The Panama Canal is not in the process of being reclaimed … the Canal is Panamanian and will continue to be Panamanian!”
The deal with a consortium led by BlackRock includes 90% of Panama Ports Company and is valued at $23 billion, CK Hutchison reported. It also includes 43 ports in 23 countries. As of now, the deal is not final, as it must be approved by Panama’s government.
Whether the pressure exerted by U.S. President Trump had anything to do with the decision by Hong Kong conglomerate CK Hutchison to sell is not yet known. CK Hutchison is a publicly listed Hong Kong company not financially tied to the Chinese government in any way.