President Trump had been hammering Panama for weeks over its most valuable asset, the Panama Canal, saying, without evidence, that China operated the waterway. There seemed to be no way Panama could get Washington off its back.
On Tuesday, Wall Street intervened.
An investment group led by BlackRock, a giant American asset manager, said it had agreed to buy two ports in Panama owned by a Hong Kong company that had become the focus of the tensions between Panama and Mr. Trump.
BlackRock will buy the ports, which sit at either end of the canal, and over 40 others from the Hong Kong conglomerate, CK Hutchison, for about $19 billion. Though Mr. Trump has other complaints about the canal — it charges too much, he contends — the deal greatly relieves pressure on Panama, political analysts said.
“It is an elegant off-ramp for what looked to be an unsolvable crisis,” said Benjamin Gedan, director of the Latin American program at the Wilson Center.
The deal is also an indication of the spoils available to American companies as the Trump administration pursues its America First foreign policy. And for some historians, it brings up memories of the outsize power that Wall Street banks have had in Latin America.
“Where are the Panamanian voices here?” said Peter James Hudson, an associate professor at the University of British Columbia and the author of “Bankers and Empire: How Wall Street Colonized the Caribbean.” “They are completely lost in this larger story of Trump’s efforts.”
For BlackRock, it’s the latest sign of its desire to expand beyond what it is historically been known for — managing trillions of dollars for everyday investors in stock and bond funds. BlackRock is buying the ports through Global Infrastructure Partners, an investment firm it bought last year for almost $13 billion that owns and operates many ports, airports and data centers.
The conversations between the BlackRock-led consortium and executives at CK Hutchinson, which is owned by the Li family, one of Asia’s wealthiest, began a few weeks ago, according to a person familiar with the discussions.
The Li family believed it was under political pressure to exit the ports business, particularly its holdings in the Panama Canal, the person said.
The Panama Canal provides a crucial shortcut, connecting the Pacific and Atlantic Oceans. Vessels do not need to stop at Panama’s ports to go through the canal.
Mr. Trump has frequently said he wants the United States to retake control of the waterway, which it ceded to Panama in 2000.
CK Hutchison has operated the Balboa and Cristóbal ports since 1997, when Panama granted the company 25 year concessions for the facilities. The concessions were renewed for another 25 years in 2021. The BlackRock investment group will be buying the companies that own the port concessions.
In the past several days, executives at BlackRock, including Laurence D. Fink, its chief executive, and a board member, Adebayo Ogunlesi, briefed Mr. Trump; the Treasury secretary, Scott Bessent; the secretary of state, Marco Rubio; and others on the deal, according to two people involved in the deal. The administration was supportive, they added.
The Li family specifically sought an American buyer, one of the people briefed on the discussions said. There were three other bids for the deal, another person familiar with the deal said.
Frank Sixt, a co-managing director at CK Hutchison, said in a statement that the deal was “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama ports.”
This is BlackRock’s largest infrastructure deal ever. It is doing the deal with a partner known as Terminal Investment Limited, which operates ports served by the world’s largest container shipping company, Mediterranean Shipping.
The deal adds to Terminal Investment’s portfolio of ports in Europe and Latin America, and in addition to operating ports in the Panama Canal, the buyers were particularly interested in CK Hutchison’s ports in Asia.
“These world-class ports facilitate global growth,” Mr. Fink said in a statement.
This deal also shows just how central Mr. Ogunlesi has become to BlackRock. After BlackRock acquired Global Industrial Partners, or GIP, Mr. Ogunlesi became the firm’s largest individual shareholder. He separately sits on the board of Terminal Investment Limited.
“BlackRock couldn’t have done it without GIP, and GIP without BlackRock,” said Ralph Schlosstein, chairman emeritus of the investment bank Evercore and a co-founder of BlackRock. “The connectivity that Larry has with public sector leaders around the globe and the capabilities that Bayo brings to the table are a compelling combination.”
The Trump administration’s support of the BlackRock-led deal to buy these ports comes after Mr. Fink and the firm has been the target of many conservative lawmakers and politicians for his past comments urging corporations to consider environmental, social and governance, or E.S.G., goals. More recently and particularly in recent weeks, BlackRock has stepped back from E.S.G. and diversity initiatives.
CK Hutchison is part of the conglomerate founded by Li Ka-shing, who was Hong Kong’s richest man at one point. Mr. Li retired in 2018 and handed over control to his son Victor Li. The conglomerate includes retail chains, telecommunications networks and energy companies.
Mr. Trump has also taken aim at the fees that the Panama Canal charges shipping companies to use the waterway. The fees have gone up in recent years, but the Panamanian agency that runs the canal has said droughts, investments in upgrades and sheer demand were responsible for the increases.
The ports concessions awarded to CK Hutchinson in 2021 were recently challenged in a Panamanian court by two lawyers who contended that the concessions were unconstitutional. The lawsuit prompted speculation that the Panamanian lawyers behind the challenge were acting as a front for other entities who stood to profit from ousting CK Hutchison. But Norman Castro, one of the lawyers, said in an email that he and the other lawyer were acting strictly in a personal capacity and out of respect for the country’s constitution.
Panamanian authorities promised to conduct an audit to verify that Hutchison “is properly reporting its revenues, payments and contributions to the state.” On Jan. 21, nearly a dozen auditors entered the company’s offices to begin their work.
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