Sunday, July 14, 2024

BlackRock Makes Infrastructure Push With $12.5 Billion Purchase of GIP

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KEY TAKEAWAYS

  • BlackRock is buying Global Infrastructure Partners for approximately $12.5 billion.
  • The acquisition will help BlackRock expands its focus on infrastructure, and is expected to close in the third quarter of 2024.
  • The deal was announced as BlackRock released fourth-quarter results that beat forecasts and saw the firm’s assets cross the $10 trillion mark.

BlackRock (BLK) is buying Global Infrastructure Partners for $12.5 billion, as the world’s largest asset manager expands its focus on infrastructure.

BlackRock will pay $3 billion in cash and roughly 12 million shares of its common stock for the infrastructure fund manager, which has over $100 billion in assets under management.

Together, the companies will manage assets worth more than $150 billion, creating an infrastructure fund that will rival the industry’s largest players, including Macquarie Asset Management and Brookfield Asset Management.

The transaction marks a major move by CEO Larry Fink to reshape BlackRock as a strong player in the fast-growing private and alternative assets markets. The deal is expected to close in the third quarter of 2024.

“The combination of BlackRock infrastructure with GIP will make us the second largest private markets infrastructure manager with over $150 billion in total AUM, providing clients—especially those saving for retirement—with the high-coupon, inflation-protected, long-duration investments they need,” Fink said in a release.

The deal was announced as BlackRock released strong fourth-quarter results that saw the firm’s assets cross the $10 trillion mark. BlackRock posted earnings per share (EPS) of $9.66 on revenue of $4.63 billion for the quarter, up from EPS of $8.93 on revenue of $4.3 billion in the year-ago quarter.

BlackRock also announced the creation of a new unified Global Product Solutions group that will consolidate its exchange-traded fund (ETF) business with product management for its other investment offerings.

Shares of BlackRock were 0.8% lower at $786.64 per share as of about 11:45 a.m. ET Friday following the news, though they’ve gained over 4% over the past year.

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