• Filing obligation depends on China revenue of BlackRock, MSC and Temasek
• SAMR’s call-in power at Beijing’s disposal
• Anti-foreign sanctions, national security measures can also apply

CK Hutchison’s potential port sale to the BlackRock-TiL consortium may fall below China’s merger filing thresholds but it is unlikely to escape scrutiny, uninvolved antitrust lawyers said.

Announced on 4 March 2025, CK Hutchison entered into an in-principle agreement with the buyer consortium to sell its 80% effective interest in Hutchison ports, including its 90% interests in the ports of Balboa and Cristobal along the Panama Canal.

The buyer consortium consists of BlackRock, Global Infrastructure Partners (GIP), and Terminal Investment Limited (TiL).

According to a CK Hutchison press release on 4 March, a definitive document on the sale of the Panama ports is expected to be signed on or before 2 April 2025, while the other part of the transaction will be negotiated and finalized on an exclusive basis within a period of 145 days, which will run until 27 July 2025.

The deal does not include CK Hutchison’s interests in its ports in Hong Kong, Shenzhen and South China, or any other ports in China.

The transaction will be conditional on legal and regulatory consent and approvals, absent any illegality or legal prohibition, requisite approval being obtained from the shareholders of the listed CK Hutchison entity, and other appropriate and customary conditions to be agreed in the definitive agreement.

SAMR threshold assessment

The port sale may not trigger a mandatory filing obligation under the State Administration for Market Regulation (SAMR), according to lawyers and an analysis by this news service. This is because the target asset may not have any China revenue and controllers of the buyer consortium and the ports’ other existing shareholders may not reach SAMR’s updated revenue threshold.

But the call-in power is always at SAMR’s disposal if the deal raises concerns for Chinese third parties, the lawyers noted.

Currently, SAMR filing is mandatory for deals with a combined global revenue of CNY 12bn (USD 1.65bn) or combined China revenue of CNY 4bn (USD 550m) for all deal parties; meanwhile at least two deal parties each must have a minimum China revenue of CNY 800m (USD 110m).

As CK Hutchison is selling its entire 80% interest in Hutchison ports and will not have any residual control over the target asset upon deal completion, only the China revenue of the assets to be sold rather than that of CK Hutchison will be counted when assessing whether the port sale deal meets SAMR filing thresholds, the lawyers noted.

When calculating the China revenue of the target assets, payments by Chinese shipping firms to overseas ports are often calculated as revenue generated from the country where the ports are located rather than as China revenue, four antitrust lawyers said.

Therefore, it is possible the target assets have no China revenue, the four lawyers noted.

PSA International, which is controlled by Singapore’s Temasek, holds the remaining 20% interest in the 43 port assets on the block.

As the target asset’s existing shareholder, if PSA International has control over the target asset, it needs to be counted as a deal party when assessing the deal’s filing obligation, the first lawyer said. And as Temasek holds 100% of PSA International shares, the calculation of PSA International’s China revenue will be that of Temasek and all portfolio companies Temasek has control over, the lawyer added. Temasek has substantial holdings in China.

As for the buyer consortium, GIP is controlled by BlackRock and TiL is ultimately controlled by BlackRock and the MSC Group. Therefore, the buyside assessment will mainly depend on whether BlackRock and MSC Group meet SAMR filing thresholds, according to the first lawyer and a fifth lawyer.

As a result, whether CK Hutchison’s port sale deal will trigger a mandatory SAMR filing or not depends on whether at least two of the three parties, including BlackRock, MSC or Temasek, meet SAMR filing thresholds.

Not so easy 

Neither BlackRock, MSC Group nor Temasek has had SAMR filings since the merger thresholds were updated in January 2024. GIP and TiL have each had one SAMR filing since the update.

On 3 September 2024, China’s Shaanxi Administration for Market Regulation published GIP and Canada Pension Plan Investment Board’s acquisition of New York-listed energy firm ALLETE under its simplified merger review procedure.

On 23 January 2025, China’s Chongqing Administration for Market Regulation published TiL’s acquisition of a stake and joint control of a container terminal in Barcelona from CK Hutchison under its simplified merger review procedure.

Notably, BlackRock’s acquisition of GIP, announced in early January 2024 and completed in October 2024, did not file under SAMR but was filed with the European Commission. Therefore, it is uncertain whether BlackRock meets SAMR’s updated threshold.

MSC Group likely meets the threshold, considering its strong presence in the Chinese market and long-term partnership with leading China terminal operators.

MSC has 28 offices in China and invested in the Ningbo Gangji Terminal, according to a company brochure in 2023. In 2008, MSC set up a joint venture travel agency with the Shanghai International Port Group (SPIG), and in 2022, MSC and SPIG set up an empty container distribution centre joint venture in Shanghai. In 2023, MSC signed an agreement with SIPG to fuel its LNG-powered container vessels.

Temasek’s China revenue could also potentially meet the minimum CNY 800m threshold.

On its website, Temasek has investments in several Hong Kong- or mainland China-headquartered companies, including AIA, Alibaba, Industrial and Commercial Bank of China, Ping An Insurance, and Tencent, but most are minority stakes in listed entities without control.

Temasek, however, has a 25% share in AS Watson, whose annual revenue in China in 2024 was HKD 13.5bn (USD 1.7bn). Temasek also controls CapitaLand, which has 42 shopping malls, 28 office buildings, 20 industrial park and logistics properties, 16 residential projects and three data centres in China.

Call-in power

SAMR’s call-in power will not be restricted by the amount of China revenue deal parties generate or if deal parties generate any China revenue at all, the lawyers noted.

SAMR will be able to call in the deal so long as it poses a real threat to the Chinese shipping, trade, and any other relevant industries, lawyers said.

According to China’s Antimonopoly Law, SAMR can call in below-threshold deals if there is evidence showing it could potentially have an anticompetitive impact.

For ports, each operates in a unique and highly local relevant market, often with little or no alternatives available, the first lawyer noted.

Therefore, it will be easy for SAMR to make the case that the port sale could result in price hikes or discrimination against Chinese companies and could harm the market competition in the relevant markets, the first lawyer added.

SAMR may want to impose remedies to avoid the deal’s adverse impact on the Chinese economy – if not outright blocking the deal, the lawyers said.

Tools at Beijing’s disposal 

Additionally, relevant laws about national security and diplomacy can be used to intervene in the port sale, a Hong Kong-based government think tank source said.

For example, Article 17 of the Implementation Rules of China’s Anti-Foreign Sanctions Law, which was published and became effective on 24 March, could be used in this situation, the think tank source added.

Article 17 of the implementation rules states that China’s State Council has the right to hold interviews, order rectifications and use other relevant measures on any entity that enforces or facilitates a foreign country to impose discriminatory and restrictive measures on Chinese citizens or organizations.

The National Development and Reform Commission (NDRC) can also call in the deal under the national security review (NSR) regime, a sixth lawyer noted. The NDRC had previously called in offshore deals that do not involve any entity in China on the target side under the NSR regime, the lawyer added.

Beijing may also use the Hong Kong National Security Law to review the port sale, a source familiar with the thinking of the Chinese government said.

CK Hutchison, BlackRock, GIP, TiL, MSC Group, PSA International did not respond to requests for comment.

Temasek directed requests for comment to PSA International as “Temasek does not own a stake in CK Hutchison, or direct PSA International’s operations”.