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Malaysia airport privatisation deal clouded by protests over Gaza war

FILE PHOTO: The BlackRock logo is pictured in New York City

By Yantoultra Ngui

SINGAPORE (Reuters) -A group of prominent Malaysian civil society bodies have started a protest against a bid by a consortium including a firm in the process of being acquired by BlackRock to take the country's airport operator private amid boycott campaigns against some U.S. firms over the Gaza war.

Around 22 organisations have issued a joint statement urging the government to reconsider and block BlackRock's participation in the deal worth about $2.6 billion to take Malaysia Airports Holdings (MAHB) private, alleging the firm has ties with Israel.

A consortium led by Malaysia's sovereign wealth fund Khazanah Nasional Bhd and state pension fund the Employees Provident Fund (EPF) announced on May 15 an offer for the shares of MAHB it doesn't already own.

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Global Infrastructure Partners (GIP) and the Abu Dhabi Investment Authority (ADIA) are also part of the consortium.

BlackRock announced in January that it would buy GIP for $12.5 billion, with the acquisition expected to close in the third quarter.

In a letter to EPF management on Thursday, the civil society organisations, including the Malaysian Consultative Council of Islamic Organisations and Viva Palestina Malaysia, urged the pension fund to cease ties with BlackRock.

The privatisation plan has also faced criticism from some opposition and ruling party lawmakers over BlackRock's involvement.

BlackRock, Khazanah, EPF and MAHB did not immediately respond to requests seeking comment on Friday.

The deal is the latest to face protests in Malaysia, a majority-Muslim country in Southeast Asia and a staunch supporter of the Palestinians.

Some Western brands in the country including Starbucks and McDonald, as in some other Muslim nations, have been targeted by boycott campaigns over Israel's military offensive in Gaza.

Malaysian's QSR Brands, the operator of fast food chains KFC and Pizza Hut in Southeast Asia, has indefinitely shelved plans to list on the local stock exchange as its businesses have been affected by the boycott campaigns, Reuters reported in April.

On May 17, Prime Minister Anwar Ibrahim said claims that 25% of MAHB would be owned by a pro-Zionist company are baseless, without naming the company, local media reported.

Anwar's office did not immediately respond to requests seeking comment on Friday.

If the deal is completed, Khazanah and EPF would jointly own 70% of MAHB, while the remaining 30% would be held by GIP and ADIA.

Shares of MAHB have climbed 36% so far this year, giving it a market value of $3.55 billion, LSEG data showed.

BlackRock is the world's largest fund manager. The New York-headquartered firm manages $9.09 trillion in assets globally as of March 2023, according to its website.

($1 = 4.7170 ringgit)

(Reporting by Yantoultra Ngui in Singapore; Additional reporting by Danial Azhar and Rozanna Latiff in Kuala Lumpur, Selena Li in Hong Kong; Editing by Sumeet Chatterjee and Kim Coghill)