by RUPINDER SINGH

US-BASED global investment manager BlackRock Inc has announced the completion of its acquisition of Global Infrastructure Partners (GIP), the entity that is set to hold a 25% stake in Malaysia Airports Holdings Bhd (MAHB) as part of a privatisation deal.

In a statement released on October 1, 2024, BlackRock stated that the merger creates a substantial entity with approximately US$170 billion in assets under management (AUM) and a diverse portfolio of more than 300 active investments.

The newly branded GIP, now part of BlackRock, will operate with a global team of around 600 professionals managing a wide-ranging investment portfolio.

BlackRock noted that the acquisition is poised to establish an industry leader in infrastructure across equity, debt, and solutions, significantly enhancing its capabilities in managing a diverse portfolio of infrastructure assets globally.

BlackRock’s chairman and CEO, Laurence D. Fink, remarked on the acquisition, stating, “Infrastructure represents a generational investment opportunity. Through the combination of BlackRock and GIP, we are well-positioned to capitalize on the long-term structural trends that will continue to drive the growth of infrastructure and deliver superior investment opportunities for clients globally.”

As part of this transition, GIP will continue to operate under its leadership team, with its co-founder Bayo Ogunlesi serving as chairman and CEO.

Despite the promising outlook, the acquisition has stirred controversy, particularly concerning BlackRock’s indirect role in the privatization of MAHB.

Last May, Khazanah Nasional Bhd, the Employees Provident Fund (EPF), GIP, and the Abu Dhabi Investment Authority (ADIA) – via a consortium named Gateway Development Alliance Sdn Bhd (GDA) – announced a conditional voluntary offer to acquire all remaining 1.12 billion shares in MAHB not already held by them at RM11 per share in cash. They also intend to delist MAHB.

Upon completion of the offer, MAHB will be wholly owned by GDA, which will be 40% owned by Khazanah, 30% by EPF, and the remaining 30% by GIP Aurea Pte Ltd. GIP Aurea is 83.33% owned by GIP and 16.67% owned by ADIA, giving GIP an effective 25% stake in GDA, while ADIA would hold a 5% share in the private entity that wholly owns MAHB.

The involvement of BlackRock in this privatisation effort has been met with backlash, fueled by accusations linking the investment firm to unethical practices, including claims of profiting from global conflicts.

Critics have expressed concerns over the potential implications of a pro-Zionist influence on MAHB’s management, despite assurances from Khazanah’s MD, Amirul Feisal Wan Zahir, that GIP would not participate in managing the airport operator.

In response to the growing discontent, Prime Minister Anwar Ibrahim labelled the criticisms as politically motivated attempts to incite division, stating, “Such claims are being raised by the opposition purely to incite hatred.”

Nevertheless, calls for transparency in the privatization process have intensified, led by civil society organisations and political figures who demand clarity regarding the deal.