(Reuters) -China is threatening to block the sale of more than 40 ports, owned by Hong Kong-based CK Hutchison, to BlackRock and Mediterranean Shipping Company (MSC) if Chinese shipping company Cosco does not get a stake, the Wall Street Journal reported on Thursday, citing unidentified sources.
BlackRock declined to comment on the report when contacted by Reuters. CK Hutchison, MSC and Cosco did not immediately respond to requests for comment.
Chinese officials have told BlackRock, MSC and Hutchison that if Cosco is left out of the deal, Beijing would take steps to block Hutchison’s proposed sale of the ports, the newspaper said.
China has always been firmly opposed to the “use of economic coercion, hegemony, bullying, and infringement of the legitimate rights and interests of other countries,” its foreign ministry spokesperson Lin Jian said at a press briefing on Friday, when asked about the report.
Tycoon Li Ka-shing’s CK Hutchison in March announced it would sell its 80% holding in the ports business, which encompasses 43 ports in 23 countries. The business has an enterprise value of $22.8 billion, including debt.
After much scrutiny and criticism in China, CK Hutchison confirmed in May that Italian billionaire Gianluigi Aponte’s family-run MSC, one of the world’s top container shipping groups, was the main investor in a group seeking to buy the ports.
BlackRock, MSC and Hutchison are all open to Cosco taking a stake, the WSJ said.
However, the parties would likely not reach a deal before a previously agreed July 27 deadline for exclusive talks between BlackRock, MSC and Hutchison, the report added.
The proposed sale has also drawn the attention of U.S. President Donald Trump, who has repeatedly expressed his desire to reduce Chinese influence around the Panama Canal and termed the deal a “reclaiming” of the waterway after it was first announced.
Reuters could not immediately verify the WSJ report.
(Reporting by Angela Christy and Mrinmay Dey in Bengaluru. Additional reporting by Colleen Howe in Beijing, Editing by Shinjini Ganguli and Mark Potter)
