Anti-Israel backlash keeps US conglomerate away from major Malaysia project

Global Infrastructure Partners says BlackRock, which acquired company this year, is not part of deal to privatize country’s airport authority, after outcry over alleged Israel ties

BlackRock's office in the Hudson Yards neighborhood of New York City. (AP/Ted Shaffrey)
BlackRock's office in the Hudson Yards neighborhood of New York City. (AP/Ted Shaffrey)

Global Infrastructure Partners (GIP) has said its buyer, the US-based investment firm BlackRock, will not be involved in privatizing Malaysia’s airport operator, after criticism in Muslim-majority Malaysia over BlackRock’s ties to Israel.

GIP, Malaysian sovereign wealth fund Khazanah Nasional and others are part of a consortium that has offered to take over Malaysia Airport Holdings Bhd (MAHB) in a privatization deal that would value the airport operator at $3.9 billion. MAHB manages 39 airports across Malaysia and an international airport in Turkey.

But the plan has come under criticism and protests from some ruling party and opposition lawmakers in Malaysia over GIP’s ties to BlackRock’s significant investments in Israel.

BlackRock, the world’s largest asset manager, acquired GIP in January for $12.5 billion, in a deal expected to be completed in the third quarter of 2024.

It is the latest target of anti-Israel protests in Malaysia, following boycott campaigns against such Western brands as McDonald’s and Starbucks.

Malaysia is often seen as one of the world’s most antisemitic countries — former prime minister Mahathir Mohamad notoriously said he was glad to be called antisemitic, and alleged that “hook-nosed” Jews run the world.

A Malaysia Airlines plane taxis to a terminal at Kuala Lumpur International Airport in Sepang, Malaysia, on April 1, 2022. (AP/Vincent Thian)

Prime Minister Anwar Ibrahim said that the October 7 attack — in which thousands of terrorists invaded southern Israel from the Gaza Strip, killed 1,200 people, mostly civilians, and took 251 hostages — was “understandable.” Israel has been at war with Hamas, the Palestinian terror group that led the assault, since then.

Malaysia has no formal ties with Israel but does maintain ties with Hamas. The state bans Israeli passport-holders from entering the country, while also seeking to prevent its citizens from traveling to Israel, inscribing on its passports: “This passport is valid for all countries except Israel.”

Anwar has described claims that 25 percent of the airport authority would be owned by a so-called “pro-Zionist company” as baseless, without naming the company, state news agency Bernama reported.

GIP said its existing leadership team will “retain full control and responsibility for the strategic direction and operation of GIP and the companies in which we have invested” after its acquisition by BlackRock, Bernama reported on Friday, citing a written reply from GIP head of transport Phil Iley.

A GIP spokesperson confirmed the Bernama 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 being a minority shareholder.

“If we are successful with our transformation, we would very much consider re-listing MAHB on the Malaysian stock exchange in the future,” he wrote.

Khazanah has said GIP would not hire staff to directly manage MAHB.

Under the deal, GIP and the Abu Dhabi Investment Authority would own 30% of MAHB, while the majority stake would be held by Khazanah and the Employees Provident Fund, Malaysia’s largest pension body. The fund did not respond to a request for comment on GIP’s statement.

Most Popular
read more: