BlackRock And Infrastructure Firm GIP Forge Alliance In $3 Billion Infrastructure Powerplay With 12 Million Common Stock Shares

Published 1 month ago
2018 New York Times Dealbook
Laurence D. Fink, Chairman and CEO, BlackRock. (Photo by Michael Cohen/Getty Images for The New York Times)

The New York-listedBlackRock is set to buy the entirety of Bayo Ogunlesi’s GIP’s business and assets.

The world’s largest asset manager BlackRock has agreed to acquire infrastructure investor Global Infrastructure Partners (GIP) for a total consideration of $3 billion in cash and approximately 12 million shares of BlackRock common stock.

In a joint statement, the organizations note that the infrastructure sector, valued at $1 trillion today, is poised for rapid growth, driven by global demands for enhanced digital infrastructure, logistical hubs, and a shift toward decarbonization. They added that the acquisition aligns with the trend of public-private partnerships becoming vital for funding essential infrastructure projects amid large government deficits.

Advertisement

Laurence D. Fink, BlackRock Chairman and CEO, expressed excitement about the potential of this merger, stating, “Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy. We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors. Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”

The combined entity, with over $150 billion in assets under management, aims to deliver market-leading infrastructure expertise globally.

GIP, managing over $100 billion in client assets since its founding in 2006, focuses on energy, transport, water, waste, and digital sectors. The acquisition brings together BlackRock’s extensive corporate relationships and GIP’s performance in infrastructure investing.

“We founded BlackRock 35 years ago based on a unique understanding of investment risk and the factors and forces driving investment returns. GIP’s deep understanding of the factors and forces driving operational efficiency for long-term value creation have made them a global leader in infrastructure investing. Bringing these two firms together will create the infrastructure platform to deliver best-in-class investment opportunities for clients globally, and we couldn’t be more excited about the opportunities ahead of us,” Fink said in the statement.

Advertisement

Bayo Ogunlesi, GIP’s Founding Partner, Chairman, and CEO, emphasized the collaboration’s significance in the same statement: “I’m excited about the power of this combination and the prospect of working with Larry and his talented team…

“We are convinced that together we can create the world’s premier infrastructure investment firm.”

The GIP management team, led by Ogunlesi, will spearhead the combined infrastructure platform, creating a powerhouse for diversified, large-scale sourcing. Subject to completion of customary procedures, Ogunlesi is set to join BlackRock’s Board of Directors post-closing.

The deal, expected to close in the third quarter of this year, is subject to regulatory approvals and other closing conditions.

Advertisement