Sanders Sends Letter to Attorney General as BlackRock Appears to Violate Federal Law

Letter

Dear Attorney General Garland, Chair Khan, and Assistant Attorney General Kanter,

I write to you to express my opposition to BlackRock's acquisition of Global Infrastructure
Partners (GIP), a private equity firm which manages $100 billion in infrastructure assets around
the world, and to call on you to use your joint antitrust authority to block this acquisition.This
$12.5 billion deal would be BlackRock's largest acquisition in 15 years.

If this deal is approved by federal regulators, BlackRock would combine GIP, the third largest
infrastructure asset manager in the world with the more than $50 billion in infrastructure assets it
already owns for a total of $150 billion in infrastructure assets. BlackRock's purchase of GIP
appears to be a clear violation of the Clayton Act. Under Section 7 of the Clayton Act, investors
cannot have stake in companies where "the effect of such an acquisition may be to substantially
lessen competition, or to tend to create a monopoly."The asset management industry is quickly
becoming a monopoly and BlackRock's acquisition of GIP will make this problem even worse.

BlackRock has made clear that the acquisition of GIP is part of an ongoing strategy to dominate
the infrastructure industry. In November, just months before the GIP deal was announced,
BlackRock announced that its Evergreen Infrastructure fund, its mutual fund for investments in
North America and Europe, had secured $1 billion in client commitments in Europe. Larry
Fink, BlackRock's CEO, said "we are working right now with two or three major companies
looking to restructure themselves, [it will be] $4 to 5 billion of equity needed to do these deals,
also talking to governments now that they are looking to transform some of their power grids and
so all of these things are acquiring, not a few hundred million, but a few billion dollars, so the
need is going to be greater, and the power of GIP, and really BlackRock, allows us to be in the
front of the pack."

As you know, the Federal Trade Commission (FTC) and Department of Justice (DOJ) recently
updated their Merger Guidelines. Under Guideline 1 of the FTC and DOJ merger guidance,
"Mergers Raise a Presumption of Illegality When They Significantly Increase Concentration in a
Highly Concentrated Market." Infrastructure asset management is already a highly concentrated
market, and this deal will dramatically widen the gap between the top three infrastructure asset
managers and the rest of their competitors. As of March 2023, Macquarie Asset Management
had nearly $340 billion in infrastructure assets under management, Brookfield Asset
Management had over $200 billion, and IFM, the fourth largest manager after GIP, holds $75
billion under management--less than half of what BlackRock will hold after this deal. With a
market so concentrated among the top few infrastructure asset managers, this deal may
concentrate the market so as to be presumptively illegal under Guideline 1.

Beyond its move to dominate infrastructure investment specifically, this acquisition would allow
BlackRock to extend its dominant position as an asset management company more broadly,
which is a major concern under Guideline 6 of the FTC and DOJ merger guidelines which states
that "mergers can violate the law when they entrench or extend a dominant position."

BlackRock is already the largest asset manager in the world, with over $9 trillion assets under
management. BlackRock also controls the Aladdin (Asset, Liability and Debt and Derivative
Investment Network) system, which handled portfolio and risk management for nearly $22
trillion in assets in 2020. Fannie Mae, MetLife, and PNC all use Aladdin, giving BlackRock
reach over investments outside of their own portfolios.

Just three Wall Street firms--BlackRock, Vanguard, and State Street--manage over $20 trillion
in assets. One of these three firms is the largest shareholder in over 85 percent of S&P 500
companies. These three companies control nearly a quarter of all shareholder votes cast at annual
meetings, leveraging their power to influence CEO compensation, stock buybacks,
environmental commitments, mergers, and pension benefits.

Guideline 11 states that "When an acquisition anvolves partial ownership or minority interests,
the agencies examine its impact on competition." Beyond individual companies, BlackRock
and the rest of the Big Three control entire industries through indirect common ownership,
particularly ones that are highly concentrated, which has led to increased concentration and
higher prices for consumers. By maintaining partial common ownership of the major players in a
given industry, existing evidence indicates that industry executives and managers have less
incentive to vigorously compete on price, even if there is no anticompetitive intent on anyone's
part. The airline industry is a clear example. The Big Three are the top three shareholders in the
top four airlines. This common ownership has been found to raise airline prices by up to 5
percent. BlackRock's acquisition of BGI alone raised airline ticket prices by 0.5 percent.

This deal is yet another example of how BlackRock is looking to further concentrate its
economic power, which is dangerous for our economy and consumers. Infrastructure is a
fundamental part of everyday life. We rely on our roads, bridges, drinking water systems,
wastewater plants, railways, schools, and housing to live. Asset managers are increasingly taking
control over the infrastructure industry, making it more and more concentrated. The inevitable
result of this concentration is unavoidable, higher costs for consumers.

I urge you to quickly and thoroughly look into BlackRock's planned acquisition of GIP. If upon
looking into this deal, you find that it would further entrench BlackRock's dominant position,
and harm competition within the infrastructure industry, I ask that you do everything in your
power to oppose it.

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