Drewry is expecting the BlackRock-TiL-CK Hutchison deal to trigger divestments for meeting the needs of regulators.

The announcement on March 4, 2025, about CK Hutchison selling its 80% stake in Hutchison Ports Holding to a BlackRock-Terminal Investment (TiL) consortium marks a significant shift in the global container terminal industry, with MSC (Mediterranean Shipping Company) set to rise to the top of Drewry’s Global Terminal Operator (GTO) league table. Here’s an in-depth breakdown of the situation:

Key Details of the Deal:

1. CK Hutchison’s Sale:

• CK Hutchison is selling its 80% stake in Hutchison Ports Holding, which operates 43 maritime container terminals outside of China and Hong Kong, spanning regions like Australia and the UAE.
• The deal is with a BlackRock-TiL consortium, which will increase MSC’s terminal portfolio, adding significant capacity to its global operations.

2. Current Status of Hutchison Ports Holding:

• Hutchison Ports currently has a portfolio with a combined terminal capacity of 73 million TEU (Twenty-foot Equivalent Units) as of 2023, and a throughput of almost 47 million TEU in the same year.
• With CK Hutchison as the majority owner and PSA International holding a minority stake (20%), this deal will significantly affect the global rankings of terminal operators.

MSC’s Strategic Position:

1. MSC’s Terminal Portfolio:

• With its majority (70%) stake in TiL and its 100% ownership of Africa Global Logistics, plus additional terminals through its wholly-owned Marinvest and other direct investments, MSC already had a significant footprint in the global terminal market.
• The total throughput of MSC’s portfolio in 2023 was over 70 million TEU, which, when combined with the acquisition, would further enhance MSC’s position as the dominant force in the container terminal sector.

2. Rise to the Top:

• As a result of the deal, MSC will leapfrog other leading Global Terminal Operators (GTOs) to become the largest terminal operator globally, securing a truly global network of container terminals.
• MSC’s global network will expand to include more strategically important terminals, adding significant capacity in crucial markets.

Regulatory Concerns:

While this deal positions MSC as the global leader in terminal operations, there are several regulatory concerns to consider, especially in certain markets where MSC might end up holding significant market share.

1. Panama:

• The deal could lead to excessive concentration in the Panama market, where TiL already holds a 42.5% stake in the PSA Panama International Terminal, which is located near the Hutchison-operated Balboa terminal (with a 90% shareholding).
• The overlap in terminal operations could raise concerns about market competition in Panama.

2. Rotterdam and Northwest Europe:

• In Rotterdam, MSC operates the Delta Dedicated North Terminal in a joint venture (JV) with ECT, where Hutchison Ports holds the majority (89.4%) stake.
• Hutchison also owns significant shares in other terminals in the Rotterdam area, such as the ECT Delta Terminal and Euromax Terminal.
• The combined presence of MSC and Hutchison in the Northwest Europe market, including MSC's dominant position in Port of Antwerp and its49.9% stake in HHLA (Hamburg), might trigger competition concerns.

3. Spain:

• In Spain, MSC and TiL are heavily involved in Port of Valencia (through MSC Terminal Valencia), and TiL holds a concession for developing additional capacity at CT4.
• On the other hand, Hutchison Ports owns BEST Terminal in Port of Barcelona, the largest facility in the port.
• This overlap could raise concerns regarding competition in the Spanish market.

Regulatory Process and Expected Divestments:

Given the size of the deal (valued at a reported $22.8 billion), the transaction is expected to face scrutiny from competition regulators around the world. Drewry predicts that the regulatory approval process may take at least a year, particularly in Northwest Europe, Spain, and Panama.

To meet regulatory requirements and address concerns about market concentration, divestments (selling off certain assets) are likely to be necessary. The authorities will closely assess the potential for anti-competitive behavior, particularly in markets where MSC would become too dominant.

Impact of the Deal:
1. Global Dominance for MSC:

• The deal positions MSC as the top global terminal operator, giving the company a more expansive network and increasing its capacity to handle container traffic across key markets.
• This expansion will allow MSC to better manage its shipping operations, enhance efficiency, and gain further control over global supply chains.

2. Challenges and Opportunities:

• Regulatory scrutiny is one of the main challenges MSC will face. The company will need to navigate these processes and potentially divest certain assets to ensure competition remains healthy in affected regions.
• Despite these challenges, the deal is seen as a major win for MSC, securing critical terminal capacity in some of the most strategic locations in the world.

The $22.8 billion deal between CK Hutchison, BlackRock, and TiL is a monumental shift in the container terminal industry, and its impact will be felt globally. MSC is set to become the largest terminal operator, but regulatory bodies will play a significant role in determining whether any divestments or further adjustments are required to ensure fair competition in key markets. This deal underscores MSC’s strategy to secure greater control over its terminal infrastructure, which will likely provide significant advantages in the ever-evolving global shipping landscape.