By Jack Pitcher and Costas Paris

World leaders rolled their eyes when President Trump kicked off his second term by threatening to take back the Panama Canal. Yet within weeks a massive sale put the waterway's biggest ports and dozens of others in American hands -- reshaping the global shipping business.

BlackRock, the world's largest asset manager, last week said it was leading a consortium that would pay $22.8 billion to buy more than 40 ports around the world, including crucial berths on either end of the Panama Canal, from Hong Kong-based CK Hutchison, controlled by one of Asia's richest men.

The deal came together in just a month, according to people directly involved, an unusually quick time frame for a deal of this scale. Trump's Panama Canal rhetoric was a catalyst that kick-started broader talks, the people said.

The whirlwind turn of events delivered a win for the White House, but people close to the deal say the prized logistics infrastructure, which spans from Latin America to Europe and Asia, is an even bigger win for BlackRock and its chief executive, Larry Fink, who has been targeted by conservative critics in recent years for climate-focused investing and BlackRock's diversity, equity and inclusion policies.

Fink has earned goodwill with many Republicans. (Trump hailed the deal in his speech to Congress last week as the beginning of America's effort to take back the waterway.) But don't ask Fink about politics -- he says he is squarely focused on returns.

Fink told investors Monday at an energy conference in Houston that BlackRock won't control the canal and the Panama ports account for only 4% of the deal's value.

"Unfortunately, the far left and the far right didn't mention that we bought 44 ports," he said. "They mentioned we bought two."

BlackRock and its partners would operate about 100 ports around the world after the deal closes.

"The world economies, over a long cycle, are going to be fine," Fink said, even in the face of tariffs. If the global economy can grow at 2% or 3%, ports will stay active, he added. "The need for global trade is only going to be larger and stronger, not weaker."

A whirlwind of calls

In the days before finalizing the deal, Fink held calls with Trump, Secretary of State Marco Rubio, Treasury Secretary Scott Bessent and national security adviser Michael Waltz, ultimately garnering the administration's blessing, according to people close to the deal.

BlackRock and its competing bidders coveted the large chunk of strategic ports that they believe will produce steady and stable returns for decades. The optical win from working with Trump was icing on the cake.

Behind the scenes, Hutchison executives had grown uneasy that a hostile Trump administration could make life hard on their sprawling global conglomerate, according to people familiar with the company. Rubio met with Panama's president in February, informing him that Trump had determined the Chinese Communist Party had "unacceptable" influence over the canal and "immediate changes" were necessary.

Hutchison executives had weighed selling these and dozens more ports before, but the timing wasn't right. With Trump applying pressure -- and Hutchison shares trading at a substantial discount to the company's underlying assets -- that changed.

Fast deals are characteristic of Li Ka-shing, the 96-year-old billionaire founder of Hutchison who is known as Hong Kong's superman.

People directly involved in the deal said Hutchison executives' first thought was to go to court and fend off pressure to sell their ports, a business unit that Li was especially proud of. But executives were surprised by Trump's decision to revoke special trade privileges for Hong Kong, and Panama authorities had just announced an audit of Hutchison's contract. Li decided that it wasn't time to pick a fight with Trump, said a person familiar with his thinking.

Hutchison tapped former Citigroup Chief Executive Michael Corbat, who has advised the company since his 2021 retirement, to broker a sale, said people familiar with the matter.

His connections run deep. Corbat has a longstanding relationship with the Li family from his banking days, and he has been a guest on one of Fink's famous fly-fishing trips to Alaska.

More than half a dozen billionaires, some of the richest families in Asia and Europe, and White House officials were quickly caught up in a whirlwind of calls as firms rallied to bid on Hutchison's ports. The episode highlights the Trump administration's unorthodox style and the immense appeal of global infrastructure investment at a time when the world is changing at a clip perhaps not seen since the fall of the Berlin Wall.

Corbat and Hutchison executive Frank Sixt flew to New York to meet with potential buyers, including sounding out BlackRock's interest in Fink's office.

The Fink-Trump relationship

Only a handful of investors have the scale and operational expertise to make a realistic bid on such a sprawling network of ports. Until recently, BlackRock wasn't one of them.

BlackRock manages $11 trillion in assets, mostly in public stock and bond funds, not private infrastructure like ports. But the firm's acquisition of Global Infrastructure Partners last year is changing the type of deals it can do.

GIP operates major infrastructure assets such as pipelines, data centers and airports, including London's Gatwick, giving BlackRock operational expertise. Neither BlackRock nor GIP had done a private asset deal this large before. Fink, billionaire GIP chief Adebayo Ogunlesi, and Terminal Investment Limited -- a port manager owned by Italy's billionaire Aponte family -- put a bid together anyway.

The BlackRock consortium didn't hire investment banks to advise on the deal, negotiating directly instead. Hutchison was advised by Goldman Sachs in addition to Corbat.

Diego Aponte, whose family owns GIP partners TIL and Mediterranean Shipping Co., helped lead negotiations for the BlackRock consortium and the competition was fierce, said one person involved in the deal. American private market giants Blackstone and KKR were also placing bids. Stephen Schwarzman and Henry Kravis, the billionaire leaders of the two firms, were directly involved, a person familiar with the matter said.

Fink's political connections, GIP's operational expertise in ports, and an existing relationship between the Aponte and Li families helped the BlackRock consortium gain the most traction. The BlackRock group placed the highest bid with the most attractive terms, and had fewer antitrust concerns related to existing assets in the same markets as some competitors, people involved said.

The agreement gives the BlackRock consortium control of more than 40 ports in 23 countries, including Mexico, the Netherlands, Egypt, Australia and South Korea, a huge swath of infrastructure that once made Hutchison the world's largest terminal operator.

Before agreeing to finalize anything, Fink briefed the White House, and BlackRock wouldn't have moved forward without Trump's support, people involved said.

BlackRock had a deal, and the sides announced the transaction ahead of the president's speech before Congress last week. Trump proudly noted that an American company was buying the Panama ports.

"We're taking it back," he said to cheers from Republican lawmakers.

Fink's connection to Trump might come as a surprise to observers who have watched the Republican-led anti-woke backlash against BlackRock unfold in recent years, but their relationship dates back years. BlackRock used to manage money for the Trump Organization, and despite political differences -- Fink is a self-described conservative Democrat -- he and other BlackRock executives have maintained a direct line to Trump and his advisers, people familiar with the matter say.

"I'd much rather deal with BlackRock than a China-based company, and BlackRock is fine. I knew they were doing that. I was totally OK with it, " Trump said in a Fox News interview Sunday.

Write to Jack Pitcher at jack.pitcher@wsj.com and Costas Paris at costas.paris@wsj.com

(END) Dow Jones Newswires

March 10, 2025 23:00 ET (03:00 GMT)

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