The news:
- BlackRock, a U.S. multinational investment company, plans to acquire Global Infrastructure Partners (GIP), an infrastructure investment fund, for about $12 billion in cash and stock.
- In the deal, expected to close in the third quarter of 2024 pending regulatory approvals, BlackRock will pay $3 billion in cash and approximately 12 million shares, currently worth $9.5 billion.
- Adebayo Ogunlesi, Chairman and CEO of GIP, and five of the company's founding partners will join BlackRock upon completion of the deal.
Ogunlesi worked at Credit Suisse for 23 years, where he became Executive Vice Chairman before leaving to found GIP in 2006, with support from Credit Suisse and General Electric Co.
David Solomon, Goldman Sachs CEO, said Ogunlesi, who sits on its board, will have to step down following his BlackRock move.
Global Infrastructure Partners (GIP) is an independent infrastructure fund manager handling businesses and assets in the energy, transportation, digital, water and waste sectors.
Its portfolio includes Edinburgh Airport, Britain's Gatwick Airport, the Ports of Brisbane and Melbourne, East India Petroleum, Sydney Airport, and the Ruby Pipeline.
Per GIP, it currently manages $100 billion in assets with an equity portfolio grossing $80 billion in combined annual revenues.
In the last quarter of 2023, BlackRock suffered revenue stagnation while its environmental, social, and corporate governance initiatives came under fire in the United States.
Consequently, BlackRock, which currently manages $10 trillion in assets, intensified its focus on infrastructure investments.
Per the firms, BlackRock's worldwide connections with corporations and sovereigns, combined with GIP's unique origination and business enhancement skills, provide a diversified and extensive sourcing platform that facilitates deal flow and co-investment opportunities for clients.
“We believe bringing GIP and BlackRock together will deliver to clients the benefits of broader origination and business improvement capabilities.”
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BlackRock's Chairman and CEO, Larry Finks, says that given its ability to change the course of the world economy, infrastructure — the mainstay of GIP — is one of the most promising long-term investment opportunities. Therefore, BlackRock can increase its alternative investments with the GIP deal.
This deal, when completed, will make BlackRock a major player in digital infrastructure, power, and port investment globally.
Meanwhile, on October 3, 2023, GIP announced that it had entered into a binding agreement to sell a stake of about 50% in Italo, Nuovo Trasporto Viaggiatori, a private high-speed rail operator, to the Mediterranean Shipping Company.
