BlackRock Inc. has disclosed its readiness to acquire Adebayo Ogunlesi’s Global Infrastructure Partners for around $12.5 billion.
The acquisition is anticipated to finalize in the third quarter and BlackRock will pay $3 billion in cash and around 12 million shares, which would have been valued at nearly $9.5 billion at Thursday’s closing.
Ogunlesi, the chairman and CEO of GIP and a former executive at Credit Suisse, will be joining the global executive committee and board of BlackRock.
The acquisition of GIP, a wealth management company, managing $100 billion is the largest transaction for BlackRock in over a decade and a significant move by CEO Larry Fink to position the company as a major participant in the quickly expanding private and alternative asset market.
“The unprecedented need for new infrastructure – for digital infrastructure, for upgraded logistics hubs, and for decarbonization and energy security – coupled with record high government deficits means that private capital will be needed like never before,” BlackRock President Rob Kapito said in a memo to employees.
“This will be one of the fastest-growing areas of our industry over the next 10 years.”
The buyout, which was revealed in a statement on Friday along with BlackRock’s fourth-quarter earnings and a big change in management, was the company’s biggest acquisition since it bought Barclays Global Investors in 2009. It would position the asset manager to become the largest provider of exchange-traded funds.
GIP has been one of the major participants in that market, acquiring significant holdings in several of the busiest airports, such as Gatwick in London. Infrastructure bets can include less glamorous projects like toll roads and bridges, but data centres and energy transition projects are becoming more and more appealing to big investors. The usually consistent, recurrent profits that investments attracts.
According to its website, Ogunlesi, 70, founded the company in 2006 with support from General Electric Co. and Credit Suisse.
The firms in its portfolio have combined annual revenues of over $80 billion. As of right now, Ogunlesi is the main director of Goldman Sachs Group Inc.
