Blackrock Agrees To Acquire Global Infrastructure Partners

By Author: Arina Smith
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BlackRock's Acquisition of Global Infrastructure Partners: A Strategic Move in the Evolving Infrastructure Landscape
BlackRock, Inc. (NYSE: BLK) and Global Infrastructure Partners (GIP) have entered into a groundbreaking agreement, with BlackRock acquiring GIP for a total consideration of $3 billion in cash and approximately 12 million shares of BlackRock common stock. This strategic move underscores the significant growth potential in the infrastructure sector, which is currently a $1 trillion market and is anticipated to be one of the fastest-growing segments in private markets.

Key Highlights of the Deal
Strategic Rationale: The acquisition aligns with the long-term vision of both BlackRock and GIP, capitalizing on the burgeoning opportunities in global infrastructure. The combined entity aims to leverage its comprehensive global infrastructure offerings, providing clients with market-leading expertise across equity, debt, and solutions.

Market Trends Driving Infrastructure Investment: The infrastructure sector is witnessing increased demand for upgraded digital infrastructure, logistical hubs, and ...
... a focus on decarbonization and energy security. The collaboration between BlackRock and GIP positions them strategically to navigate and capitalize on these evolving trends.

Government Deficits and Public-Private Partnerships: Large government deficits create a need for capital mobilization through public-private partnerships to fund crucial infrastructure projects. The combined capabilities of BlackRock and GIP are poised to play a critical role in addressing this funding gap.

Client Benefits: The integration of GIP with BlackRock's infrastructure offerings creates a global infrastructure powerhouse with enhanced origination and asset management capabilities. Clients are expected to benefit from broader origination and business improvement capabilities, leading to diversified, large-scale sourcing and co-investment opportunities.

Vision for the Future
Laurence D. Fink, Chairman and CEO of BlackRock, emphasized the exciting long-term investment opportunities in infrastructure, driven by structural shifts in the global economy. The expansion of both physical and digital infrastructure is expected to accelerate, addressing priorities such as self-sufficiency, security, and sustainability.

Bayo Ogunlesi, GIP Founding Partner, Chairman, and CEO, expressed enthusiasm about the combination, envisioning the new entity as the preeminent infrastructure solutions provider for global corporates and the public sector. The collaboration aims to mobilize long-term private capital through established firm relationships.

Financial Details and Closing Timeline
Under the terms of the transaction, BlackRock will acquire 100% of GIP for a total consideration of $3 billion in cash and approximately 12 million shares of BlackRock common stock. Approximately 30% of the total consideration, all in stock, will be deferred and issued in approximately five years, subject to certain post-closing events.

The transaction is expected to be modestly accretive to BlackRock's adjusted earnings per share and operating margin in the first full year post-close. The deal is anticipated to close in the third quarter of 2024, pending customary regulatory approvals and other closing conditions.

Conclusion
BlackRock's acquisition of Global Infrastructure Partners signifies a major milestone in the evolution of the infrastructure investment landscape. The collaboration between these two industry leaders positions them strategically to address the growing demand for infrastructure projects worldwide. As the world embraces the importance of sustainable and resilient infrastructure, BlackRock and GIP's combined expertise is expected to shape the future of global infrastructure investment.