BlackRock strikes $18.7b deal to buy GIP
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The news: The world’s largest asset manager, BlackRock, has agreed to buy Global Infrastructure Partners (GIP) for over USD12.5 billion ($18.7 billion) in a cash and stock transaction.
The numbers: The transaction will see BlackRock acquire 100% of GIP’s business and assets for USD3 billion cash and approximately 12 million shares of BlackRock common stock. As GIP holds around USD106 billion in assets, in combination with BlackRock’s USD50 billion in infrastructure assets under management, the purchase will make BlackRock the world’s second largest manager of private infrastructure assets.
The context: The acquisition underscores the $10 trillion money manager's growing efforts to expand into alternative assets, and the FT explains that despite BlackRock already having allocated $275 billion to alternatives, some analysts argue that BlackRock is punching below its weight in the long term investments that GIP is renowned for.
The deal is the largest that BlackRock has inked since its purchase of Barclays Global Investors in 2009.
What they said: “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,” said Larry Fink, BlackRock chairman and CEO.
The source: BlackRock Press Release
