Hutchison Ports operates container terminals at Brisbane (above) and Sydney. Photo: Hutchison Australia

THE AUSTRALIAN Competition and Consumer Commission has signalled its interest to further investigate the proposed sale of Hutchison Ports Australia’s assets.

This follows the announcement that its parent, CK Hutchison, is set to be sold to a consortium including US investment firm BlackRock, Global Infrastructure Partners, and Terminal Investment Limited (BlackRock-TiL Consortium).

Hutchison Ports Australia operates international container terminals at Port Botany in Sydney and the Port of Brisbane.

Announced on March 4, the sale includes Hutchison’s 90 percent interests in the Panama Ports Company, which owns and operates the ports of Balboa and Cristobal in Panama, and the 80pc “effective and controlling interest” in subsidiary, Hutchison Port Holdings, excluding the Chinese and Hong Kong port properties.

Outside of China and Hong Kong, HPH owns and operates 43 ports comprising 199 berths in 23 countries.

The US$22.8 billion transaction remains subject to regulatory approvals and due diligence, with the parties expected to sign definitive documents on or before April 2.

CK Hutchison co-managing director Frank Sixt said the transaction was expected to deliver cash proceeds of more than $19B to the group.

“This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received,” Mr Sixt said in a statement.

“As a result, the transaction valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders.”

BlackRock purchased Global Infrastructure Partners, a US-based infrastructure investment fund, last year.

Headquartered in Switzerland, Terminal Investment Limited is a global port and terminal operator.

It is majority owned by Mediterranean Shipping Company (MSC), the world’s largest container-shipping company which operates in over 60 terminals across 27 countries.

MSC Group president and Terminal Investment Limited chairman Diego Aponte said the company has an existing long-term relationship with Hutchison Ports that is one “of mutual respect and friendship”.

“Furthermore, we are very pleased to partner with BlackRock and Global Infrastructure Partners, with whom we share a longstanding relationship,” Mr Aponte said in a statement.

“We have a very high regard toward the Hutchison Ports management team, and once this transaction closes, we look forward to welcoming them into our larger family.

“We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially.”

Competition questions

It is the connection between the BlackRock-TiL Consortium and MSC which has drawn the attention of the Australian freight industry and the ACCC.

Headquartered in Fremantle, Western Australia, the company already has operations in the country via subsidiary MSC Australia, which it founded in 1989.

According to its website, MSC Australia has “built a strong expertise in fields such as agriculture, dairy, meat, fruits, beverages and other food products, as well as paper materials, forest products and minerals”.

The company operates a fleet of container ships that connect Australian ports to major international markets.

MSC also wholly owns logistics company MEDLOG, which offers services in Australia such as inland transportation, terminal operations, container yard services, and warehousing.

Its facilities include empty container parks at the Port of Brisbane and Melbourne as well as operating seven regional offices.

In April last year, MEDLOG acquired LINX Regional Logistics, a multi-modal transport company based in New South Wales’ Riverina region, which specialises in the transport of agricultural products to ports and storage facilities.

In a recent Freight Trade Alliance webinar, participants asked ACCC commissioner Anna Brakey whether the transaction would be investigated by the competition watchdog.

“It’s very early days; we haven’t started to look into that, but it is something that we would be interested having a look at,” Ms Brakey said.

She said the proposed sale would “raise issues of vertical integration”.

“It’s something that we are likely to take an interest in.”

Hutchison began its Australian operations in 2013 and reportedly invested more than $600M between 2012-13 and 2014-15 to start its Brisbane and Sydney container stevedoring businesses.

According to the ACCC’s Container stevedoring monitoring report 2023-24 released in December, Hutchison lifted 400,000 twenty-foot equivalent units (TEUs) in 2023-24, up 10.6pc on the previous period.

This compares to a national total of 5.5 million lifts for the year, placing Hutchison as Australia’s fourth-largest operator, behind market leaders Patrick Terminals and DP World, and Victoria International Container Terminal.

In Brisbane and Sydney, Hutchison has competition from DP World and Patricks which both have container terminals at the two ports.

Cotton and chickpeas are among the key containerised grain exports from the Port of Brisbane, while Port Botany handles container exports of barley, chickpeas, faba beans, lupins, wheat, and cotton.

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