KUALA LUMPUR (Reuters) – Global Infrastructure Partners (GIP) said its buyer BlackRock (NYSE:) will not participate in the privatization of Malaysia’s airports following criticism from Muslim-majority Malaysia over the U.S. firm’s alleged ties to Israel.
GIP, Malaysian sovereign wealth fund Khazanah Nasional and others are part of a consortium that has offered to take over Malaysia Airports Homeport (MAHB) in a privatization deal that values the airport operator at $3.9 billion.
The plan has faced criticism and protests from some ruling party and opposition lawmakers in Malaysia, staunch supporters of the Palestinians, over GIP’s ties to BlackRock’s significant investments in Israel, which is waging a war against the militant Palestinian group Hamas in the Gaza Strip.
The planned privatization of MAHB is the latest protest in Malaysia, following boycott campaigns against Western brands such as McDonald’s (NYSE:) and Starbucks (NASDAQ:) over the Gaza war.
GIP said its current management team “will retain full control and responsibility for the strategic direction and performance of GIP and the companies in which we have invested” following its acquisition by BlackRock, state news agency Bernama reported on Friday, citing GIP’s written response. transport director Phil Iley.
A GIP spokesman confirmed Bernama’s report. Khazanah did not immediately respond to requests for comment.
Iley said the firm would provide MAHB with as much operational support and assistance as needed despite it being a minority shareholder.
“If we are successful in our transformation, we will very carefully consider the possibility of re-listing MAHB on the Malaysian Stock Exchange in the future,” he wrote.
Khazanah said GIP would not hire staff to directly manage MAHB, and Malaysian Prime Minister Anwar Ibrahim called claims that 25% of MAHB would be owned by a pro-Zionist company baseless, without naming the company, Bernama reported.
Under the terms of the deal, GIP and the Abu Dhabi Investment Authority will own a 30% stake in MAHB, with a majority stake held by Khazanah and the Employees Provident Fund, Malaysia’s largest pension authority. The foundation did not respond to requests for comment on GIP’s statement.
BlackRock’s $12.5 billion acquisition of GIP is expected to close in the third quarter.
MAHB operates 39 airports throughout Malaysia and an international airport in Turkey.