BlackRock, world's largest asset manager, pays $12.5 bln for Global Infrastructure Partners
BlackRock pays $12.5 bln for Global Infrastructure Partners (Getty Images)
Global Infrastructure Partners (GIP), which owns Britain's Gatwick airport and the Port of Melbourne among other companies, is being sold to the U.S. investment firm BlackRock for a massive $12.5 billion, according to The Guardian and Reuters.
Five out of six founding partners will join BlackRock as part of the deal, making BlackRock the second-largest infrastructure investor globally. BlackRock, which handles around $10 trillion in assets, is making a deal worth $3 billion in cash and 12 million of its own shares. The 400 people working directly for GIP will get some of these shares too.
"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," said BlackRock Chief Executive Larry Fink.
BlackRock is also setting up a fresh international business framework to oversee operations in Europe, the Middle East, India, and the Asia Pacific.
GIP
GIP started in 2006 with $500 million each from General Electric and Credit Suisse. It quickly grew, buying struggling assets in the energy, transport, and water industries, enhancing, and selling them for a profit. Now, it owns 40 companies making over $75 billion in annual revenues.
Its portfolio includes Gatwick airport, a share in Peel Ports (which owns seven ports), Suez wastewater group and the Hornsea 1 project to build the world’s largest offshore wind farm. BlackRock wants to benefit from the increasing global government spending on infrastructure.
Investing in infrastructure is currently very popular because there is a high demand for logistics and digital infrastructure. Besides, there is a massive need for trillions of dollars to shift away from high-carbon energy.
"At first glance, we view the transaction as a long-term positive as private equity and debt investing is one of the fastest growing categories within asset management," said Kyle Sanders, an analyst .
