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.

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“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.

Source: Investopedia

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