BlackRock has set out a deal to buy Global Infrastructure Partners (GIP) for around $12.5 billion.
It will pay $3bn in cash, with around $9.48bn in 12 million BlackRock shares. GIP is an investor in a number of infrastructure assets, including a wide array of energy projects around the world.
BlackRock said GIP had more than $100bn in assets under management (AUM). After closing, the investor would have around $150bn AUM.
“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” said BlackRock CEO and chairman Laurence Fink. The company expects infrastructure to continue growing in importance. Governments will “prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors,” he said.
“Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”
BlackRock will defer 30% of the total, in stock, for a period of five years. It will pay this out based on performance after closing. BlackRock will fund the $3bn through additional debt. It expects to close the deal in the third quarter of 2024.
GIP chair Bayo Ogunlesi, and four of the company’s founding partners, will lead the new combined infrastructure team. The statement said they would “remain highly committed to clients” and working with BlackRock would “generate even greater opportunities”.
Ogunlesi will also join the BlackRock board at the next scheduled meeting, following the closing of the deal.
The GIP chair and CEO said private infrastructure investing provided “stable cashflows, less correlated returns, and a hedge against inflation. Global corporates have turned to private infrastructure as a fast innovator and a more commercially agile owner of infrastructure assets that aren’t core to their commercial businesses.”
The new infrastructure team would be the “preeminent, one-stop infrastructure solutions provider for global corporates and the public sector”, Ogunlesi said.
GIP bought into Hornsea 1 in 2018, it continues as a minority owner having sold off some of its equity. It also has a 30% stake in Peel Ports, the UK’s second largest port group. Other UK interests include Yarmouth and Edinburgh Airport.
GIP has interests in renewable energy, midstream projects and LNG production. It has been a major supporter of new US LNG projects, for instance signing up to help finance NextDecade’s Rio Grande LNG project, in Texas. Under this deal, GIP and other financiers received equity interests of 62.5% of the project’s cash flows.
In 2020, GIP was part of a joint venture investment group that acquired a stake in Adnoc’s gas pipelines unit. BlackRock has also been interested in this space, also participating in Adnoc’s midstream projects and a similar deal with Saudi Aramco. BlackRock appointed Aramco CEO Amin Nasser to its board in July 2023.
GIP also invests in a number of renewable energy units, including Clearway Energy Group, Vena, Atlas and Eolian.
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