Terminal Investment Limited (TiL), a subsidiary of MSC, and Blackrock have partnered in a US$22.8 billion deal to purchase the international port and terminal operations of CK Hutchison, the parent company of Hutchison Ports, reports Container News.
Key Milestone
MSC, through its Terminal Investment Limited (TiL) subsidiary, is poised to become the world’s largest terminal operator by acquiring Hutchison Ports’ international portfolio (excluding those in China). This deal, expected to be finalized next year, will give MSC a strong presence in key Asian and European regions and, notably, control of two terminals at either end of the Panama Canal.
Despite speculation, former shipping analyst Mark McVicar suggests that Hutchison’s decision to sell its international ports was not a reaction to concerns about China’s influence over the Panama Canal but rather a longer-term strategic move.
TiL and Blackrock, forming a consortium, have a 145-day exclusivity period to finalize the agreement. If completed, this acquisition will catapult TiL from seventh to first place in Drewry’s terminal operator rankings, with a combined throughput of over 78 million TEUs (36 million from Hutchison and 43.2 million from TiL).
Dominant Position
Eleanor Hadland, a ports and terminals analyst at Drewry Shipping Consultants, highlighted that the Hutchison Ports acquisition, combined with MSC’s recent HHLA stake acquisition, will give MSC and TiL a dominant position in the Hamburg-Le Havre port range, considering their existing presence in Rotterdam, Antwerp, and Le Havre.
Hadland anticipates some divestments of existing MSC-controlled terminals due to scrutiny from competition authorities regarding MSC’s growing dominance in certain regions. Panama, where MSC has invested in the Port of Rodman (Pacific side), and Hutchison has concessions in Balboa (Pacific) and Cristobal (Caribbean), is one potential area for divestment.
Drewry suggests that MSC’s interest in the HHLA deal stemmed from the port’s intermodal network. Hadland explained that securing capacity at key ports provides leverage on investments in ports and inland networks, especially with the increasing focus on net-zero operations.
Blackrock’s involvement stems from its acquisition of Global Infrastructure Partners (GIP), which held a 20% stake in TiL. MSC owns 70% of TiL, with the remaining shares held by Singapore’s GIC wealth fund.
Mark McVicar believes CK Hutchison’s decision to sell its international ports business was predictable, as the company viewed the terminal business primarily as a source of cash, with limited investment over the last decade.
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Source: Container News
