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Global Infrastructure Partners (GIP) has stated that BlackRock (NYSE: BLK) will not engage in the privatization of Malaysia Airports, following a backlash in Muslim-majority Malaysia due to the U.S. firm's alleged connections to Israel.
This initiative has sparked protests and criticism among both government and opposition figures in Malaysia, a vocal supporter of Palestinian rights. These figures have expressed concerns over GIP's association with BlackRock, given its significant investments in Israel, which is currently embroiled in conflict with Hamas in Gaza. The sentiment mirrors recent boycott campaigns in Malaysia against Western firms such as McDonald’s (NYSE: MCD) and Starbucks (NASDAQ: SBUX) in the wake of the Gaza conflict.
Through Phil Iley, the head of transport, GIP has clarified that post-acquisition by BlackRock, the existing leadership would maintain comprehensive control and strategic oversight of GIP and its investments. This was confirmed via a written statement, as reported by Malaysia's state news agency Bernama. Khazanah Nasional and the Malaysian Prime Minister, Anwar Ibrahim, have downplayed allegations that 25% of MAHB would be owned by a pro-Zionist firm, with Ibrahim labeling these claims as unfounded.
Under the proposed deal structure, GIP, in conjunction with the Abu Dhabi Investment Authority, would hold 30% ownership of MAHB. Khazanah Nasional and the Employees Provident Fund, Malaysia's most substantial pension fund, would retain the major shareholding. While Khazanah did not respond to queries, GIP emphasized its commitment to supporting MAHB's operations. It hinted at a potential future re-listing on the Malaysian stock exchange, contingent on successful transformation efforts.
BlackRock's acquisition of GIP, valued at $12.5 billion, is anticipated to be finalized in the third quarter. MAHB operates 39 airports within Malaysia and an international airport in Turkey, positioning it as a pivotal player in the regional aviation sector. For traders and investors, the ongoing developments around MAHB's privatization provide critical insights into the geopolitical and financial considerations shaping investment decisions and market movements.
