Parties involved in CK Hutchison's port transaction must not circumvent review process

China's State Administration for Market Regulation (SAMR) said on Sunday that it is paying close attention to CK Hutchison's planned sale of its overseas port assets and will conduct a review in accordance with the law, CCTV reported. 

The regulator emphasized that all parties involved in the transaction must not take any measures to circumvent the review process by any means or implement concentration activities without regulatory approval. Otherwise, legal responsibility will be pursued, CCTV reported. 

The SAMR's statement came in response to media inquiries following a Wall Street Journal (WSJ) report on April 16. The WSJ reported that CK Hutchison plans to split its overseas port asset sale into two separate transactions, as a way to advance the deals.

According to the WSJ, the Mediterranean Shipping Company (MSC) is considering carving out two Panamanian ports from the $22.8 billion deal to purchase dozens of terminals from CK Hutchison, citing sources familiar with the matter.

MSC has reportedly discussed advancing the majority of the acquisition, which involves 41 port terminals across five continents, while resolving disputes over the two Panamanian ports, the WSJ reported.

The deal involves collaboration with US asset manager BlackRock and has been structured into two components with different ownership frameworks: one for the Panama ports and another for the remaining assets. Discussions on the two components are moving in parallel, and separating the Panama ports would ultimately require the parties to reach a new agreement, according to the WSJ. 

The WSJ further noted that the BlackRock-MSC consortium and Hutchison are currently within a 145-day exclusive negotiation period and have not yet signed final agreements. 

Prior to the report, a spokesperson from the second antitrust enforcement division of SAMR said on March 28 that it would review CK Hutchison's Panama Canal ports deal in accordance with the law to ensure fair market competition and protect public interests, according to a Q&A release conducted by Hong Kong Ta Kung Wen Wei Media and published on the regulator's official website.

On March 31, China's Foreign Ministry spokesperson Guo Jiakun responded to the SAMR's review of the planned port asset sale at a press briefing, stressing that China firmly opposes using economic coercion and bullying to harm other countries' legitimate rights and interests.