BlackRock to buy GIP in $12.5 billion deal

BlackRock’s GIP acquisition: BlackRock announced its acquisition of Global Infrastructure Partners (GIP) in a transaction valued at $12.5 billion, concurrently revealing an 8 per cent increase in its quarterly earnings, largely driven by a resurgence in market activity that augmented the firm's assets under management (AUM).

The acquisition entails BlackRock paying $3 billion in cash and issuing approximately 12 million of its own shares to GIP, establishing an investment platform with a cumulative asset base surpassing $150 billion. Established in 2006, GIP oversees more than $100 billion in client assets, specialising in infrastructure equity and debt investments across sectors such as energy, transportation, water, waste management, and digital infrastructure.

AUM reaches $10 trillion

Recent optimism surrounding a 'soft landing'—a scenario envisaging inflation alleviation without a drastic uptick in unemployment—has buoyed US financial markets. The accommodating stance adopted by the US Federal Reserve, maintaining stable interest rates since July, has further energised the market sentiment. Consequently, BlackRock concluded the fourth quarter with AUM reaching $10.01 trillion, an ascent from $8.59 trillion reported a year prior.

In adjusted terms, BlackRock's earnings for the quarter ending December 31 totalled $1.45 billion, equating to $9.66 per share, compared to $1.36 billion, or $8.93 per share, recorded in the corresponding period the previous year. Analysts, as per data from LSEG, had anticipated earnings of $8.84 per share on average.

(With Reuters inputs)