A group headed by the US investment firm BlackRock has agreed to purchase the majority of a Hong Kong-based company’s holding in two important ports on the Panama Canal.
The deal follows weeks of President Donald Trump’s complaints that the US should seize control of the main shipping route and that the canal is controlled by China.
CK Hutchison Holding runs ports at the canal’s entrances to the Atlantic and Pacific oceans through a subsidiary.
It announced on Tuesday that it would sell its stake in a $22.8 billion (£17.8 billion) deal.
The Chinese government does not own CK Hutchison, which was established by Hong Kong tycoon Li Ka-shing. However, because of its Hong Kong base, it is subject to Chinese financial regulations. Since 1997, it has run the ports.
Together with the two canal terminals, the agreement covers 43 ports in 23 nations worldwide. The Panamanian government will need to approve it.
The primary connection between the Atlantic and Pacific oceans is the 51-mile (82-kilometer) Panama Canal, which runs through the country in central America.
Every year, up to 14,000 ships pass through it, including military vessels and container ships transporting automobiles, natural gas, and other commodities.
Early in the 20th century, it was constructed. Up until 1977, when accords gradually returned the territory to Panama, the US retained sovereignty of the canal zone.
In 1999, Panama assumed sole control following a period of joint control.
Trump has presented a number of justifications for regaining authority over the canal and its environs. He said that US ships are overcharged for utilizing the waterway, that Chinese influence poses a threat to national security, and that the US investment in the canal’s original construction warrants regaining ownership.
US Secretary of State Marco Rubio called for “immediate changes” to what he describes as China’s “influence and control” over the canal during a February visit to Panama.
As Trump claims, does China “run” the Panama Canal?
The canal “is and will remain” in the hands of Panama, according to President Jose Raul Mulino, who refuted the US government’s accusations.
Frank Sixt, co-managing director of CK Hutchison, said in a statement announcing the business deal: “I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.”
One of the biggest asset management firms in the world is BlackRock. A Swiss company called Terminal Investment Limited is also part of the group purchasing the ports.
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