The deal will see BlackRock pay $3bn in cash and around 12 million shares of BlackRock common stock, with 30% of the stock payable after five years, subject to the satisfaction of certain post-closing events.
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At completion, the combination of GIP’s $100bn of client assets with BlackRock’s $50bn infrastructure operation will create a $150bn infrastructure platform spanning equity, debt and solutions.
The platform will be led by GIP founding partner, CEO and chair Bayo Ogunlesi and four other founding partners.
Once the deal is finalised, Ogunlesi will be appointed to BlackRock’s board.
The combined platform is set to make BlackRock the second-biggest infrastructure manager in the world after Macquarie.
Larry Fink, chair and CEO of BlackRock, described infrastructure as one of the “most exciting” long term investment opportunities.
He added the expansion of physical and digital infrastructure “will continue to accelerate”, with governments prioritising self-sufficiency and security via increasing their domestic industrial capacity, energy independence and the onshoring or near-shoring of critical sectors.
Fink also highlighted the potential of the “once-in-a-generation incentives” being implemented by policymakers for new infrastructure technologies and projects.
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Ogunlesi added: “I am excited about the power of this combination and the prospect of working with Larry and his talented team. We share with BlackRock a culture of collaboration, client focus, investment partnership and commitment to excellence. Investors have adopted private infrastructure investing for its ability to provide 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 are not core to their commercial businesses. This platform is set to be the preeminent, one-stop infrastructure solutions provider for global corporates and the public sector, mobilising long-term private capital through long-standing firm relationships.
“We are convinced that together we can create the world’s premier infrastructure investment firm.”
The acquisition is expected to complete in Q3 2024, subject to regulatory and closing conditions.