The exclusive negotiation period between CK Hutchison and the consortium concluded on July 27.The deadline for exclusive discussions regarding the US$23 billion sale of global port assets by Hong Kong businessman Li Ka-shing's CK Hutchison Holdings expired on Sunday without reaching an agreement, as experts anticipate prolonged talks due to the intense geopolitical tensions between the United States and China.
The disputed deal saw CK Hutchison divesting shares in 43 ports, including two located at both sides of the Panama Canal, to a group headed by Terminal Investment Limited, a subsidiary of the global leading container shipping company, MSC, along with American investment firm BlackRock.
The deadline on July 27 was established 145 days after the company's exchange filing on March 4, which initially revealed the exclusive negotiation period.
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Shipping and legal specialists previously informed the Post that they had little confidence the agreement would be finalized in its initial version by Sunday, noting that it might undergo significant modifications due to the political challenges and regulatory obstacles present in both Panama and mainland China.
By Sunday night, Hutchison had not revealed any details about the transaction.
In the midst of continuing trade disputes, a senior American business group was set to travel to Beijing this week, according to an exclusive report by the Post. According to sources, the visit would be arranged by the US-China Business Council.
Lau Siu-kai, an advisor to the semi-official Chinese Association of Hong Kong and Macau Studies think tank, mentioned that he anticipated the agreement's deadline would be prolonged.
"If this transaction is tied to the US-China rivalry and the broader strategic factors of both nations, then prolonging the discussions makes perfect sense," he stated.
Lau mentioned that information regarding the state-owned enterprise China Cosco Shipping Corporation possibly joining the consortium was unclear, but the company was expected to have an interest.
"If Cosco holds any form of ownership and influence over the ports' future operations, ensuring that Chinese cargo ships and shipping companies are treated equitably and without bias, then China's vital interests would be safeguarded, and this would approve the transaction," Lau stated.
He cautioned that should China reject the agreement, it would "very likely be canceled."
"If Cosco is successfully involved, it may suggest that this deal is part of the broader economic and trade discussions between China and the United States," Lau stated.
It would also indicate that the US recognizes China's significant interest in this agreement and will not let the CK Hutchison ports be completely controlled by American entities.
However, if Cosco was unable to participate or held only a minority stake, Lau stated: "China is likely to object to the deal. It is expected that CK Hutchison will not sell the ports in the face of China's disapproval, as this would significantly damage its interests on the mainland."
The most favorable result for CK Hutchison, according to Lau, would be for the US and China to come to an agreement, as the company "cannot risk alienating either party."
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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