Asset manager BlackRock acquires Global Infrastructure Partners (GIP) for a total of $12.5 billion. The move is driven by growing demand for new energy, transport and digital infrastructure. BlackRock’s chief executive officer, Larry Fink, told investors that he believes “the next 10 years are going to be a lot about infrastructure”.
Why BlackRock is buying GIP
The main reason GIP is so valuable to BlackRock and its plans is that it has stakes in green energy, airports, water and waste companies and an oil pipeline. Fink said that “if we are going to decarbonise the world… capital and infrastructure are going to be very necessary”. Both are available to Blackrock with the purchase of GIP.
With the attacks in the Red Sea, it is also very important to have energy independence. Not only with the situation in the Red Sea, but also with the war in Israel. The impact of this war on the oil suppliers in the Middle East is also very important. And even if it does not lead to a completely clean energy nation, not just BlackRock, but the United States as a whole needs it.
The deals happening with the purchase
Of course, BlackRock doesn’t just buy a company out of the blue. The company, which now has more than $10 trillion in assets under management, agreed to buy the company in the third quarter of 2024. Larry Fink spoke to Bayo Ogunlesi, who runs Global Infrastructure Partners, who stands to gain a lot from the deal. As part of the deal, Ogunlesi will become one of BlackRock’s largest shareholders with 12 million shares. He will also join BlackRock’s board of directors and global executive committee. It has also been agreed that each GIP seller will agree to vote in line with BlackRock’s board and that GIP employees will retain financial incentives tied to existing funds.
In a call with analysts, Ogunlesi said he liked the fact that “BlackRock thinks the stock is undervalued, and the fact that we’re taking a 75% stake in BlackRock tells us that we think it’s undervalued as well”. This deal brings optimism to the company and signals to the public that they want to grow. It also means they expect BlackRock to become even bigger than it already is.
The details of the purchase
BlackRock will pay $3 billion in cash and about 12 million shares, worth about $9.5 billion. Ogunlesi, a former Credit Suisse executive, and GIP manage about $100 billion in assets. This is the biggest deal for BlackRock in more than a decade. It was the largest acquisition since the purchase of Barclay Global Investors in 2009. It comes at a time when the company is doing very well, with more than $10 trillion in assets under management after two years.
Leave a Reply