What’s next
China’s market regulator has not revealed the details of its antitrust probe such as whether it has started investigations and the scope of its assessment. Lawyers have said the regulator may implement anti-monopoly measures, such as prohibiting or conditionally approving the transaction.
According to the deal between CK Hutchison and BlackRock, both parties have 145 days to exclusively come to a definitive agreement. After the window closes, the conglomerate could sell its stakes to others. Secrecy shrouds the start and end date of this blackout period.
Analysts have said the Hong Kong-based firm is caught in a dilemma as none of the possible options will allow it to escape unscathed amid escalating US-China tensions.
They have also warned that cancelling the deal will incur huge compensation costs while opening the company up to accusations from the US and the West that it is under the Communist Party’s thumb.
Legal challenges could still sink the deal.
Panama’s comptroller general in April ruled that CK Hutchison had deprived the country of more than US$1.3 billion through the decades-old ports concession that was “negotiated against the republic”, following a sweeping financial audit.
Two Panamanian lawyers have filed a legal bid to challenge the law that approved the contract, with the country’s Supreme Court expected to begin discussing its ruling on the case in April. The pair have argued that the control of the canal ports by CK Hutchison’s subsidiary “undermines” the country’s sovereignty.
