China's top market regulator has warned CK Hutchison Holdings and its partners to fully comply with antitrust laws during the planned sale of the company's global ports business.
The State Administration for Market Regulation (SAMR) said it is closely watching the $23 billion deal and will review it carefully.
CK Hutchison, a Hong Kong company led by tycoon Li Ka-shing, announced last month it would sell its 80% stake in 43 overseas ports to a consortium led by US investment firm BlackRock, Reuters said.
The deal does not include ports in Hong Kong or mainland China but has gained attention because two of the ports are located at the important Panama Canal.
"The parties to the transaction shall not circumvent the review in any way and shall not implement the concentration before approval, otherwise they will bear the legal responsibility," a SAMR spokesperson said in a statement.
The regulator's warning came after a Wall Street Journal report suggested that the MSC shipping empire, part of the BlackRock group, might separate the Panama Canal ports from the rest of the deal.
This could allow the bulk of the agreement to move forward while disputes over the Panama ports are settled.
Communist China’s market regulator, the State Administration for Market Regulation (SAMR), has warned CK Hutchison Holdings and other involved parties not to bypass its ongoing antitrust review of CK Hutchison’s $23 billion overseas ports sale, which reportedly includes a… pic.twitter.com/jHhyQiOt4l
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China Slams CK Hutchison Sale as Betrayal
The sale has become a political issue as well. US President Donald Trump said on Saturday that he wants American ships to travel through the Panama and Suez Canals without paying fees.
Trump has also praised the deal as a "reclaiming" of the Panama Canal. Meanwhile, Chinese state media criticized the sale, calling it a betrayal of China's interests.
Under China's Anti-Monopoly Law, a "concentration" happens when businesses merge or when one company gains control over another.
According to SAMR, all major deals that could affect market competition must be reviewed and approved first.
According to SCMP, BlackRock and the Aponte family's Terminal Investment Limited are leading the consortium. Reports say that BlackRock plans to control CK Hutchison's two Panama Canal ports, while Terminal Investment Limited would have a majority stake in the other ports.
Singapore's PSA International, which owns the remaining 20% of the ports business, is also considering selling its stake, according to sources.
For now, the market regulator is continuing its antitrust investigation. "We are highly concerned about the relevant transaction and will review it in accordance with the law," the SAMR spokesperson added.
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