BlackRock has agreed to acquire independent infrastructure fund manager Global Infrastructure Partners (GIP) in a deal worth $12.5bn, made up of $3bn of cash and about 12 million shares of its common stock.

Established in 2006, GIP manages more than $100bn in client assets across infrastructure equity and debt, with a focus on energy, transport, water and waste, and digital sectors.

Through the proposed transaction, both parties aim to create a multi-asset class infrastructure investing platform with combined client assets under management (AUM) of more than $150bn across equity, debt, and solutions.

GIP founding partner, chairman, and CEO Bayo Ogunlesi said: “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 aren’t 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.”

According to the parties, their combination will create an extensive global infrastructure franchise with differentiated origination and asset management capabilities.

BlackRock plans to finance the cash consideration via an additional debt of $3bn.

BlackRock chairman and CEO Laurence Fink said: “We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritise self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors.

“Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects.”

Subject to customary regulatory approvals and other conditions, the deal is anticipated to be completed in Q3 2024.

Perella Weinberg Partners served as lead financial adviser to BlackRock, while Skadden, Arps, Slate, Meagher & Flom and Fried, Frank, Harris, Shriver & Jacobson were legal counsel.

Evercore served as lead financial adviser for GIP while Kirkland & Ellis and Debevoise & Plimpton was the legal counsel.