‘Deals of this magnitude don’t come along very often’: Reflections on a $24bn acquisition

Late last year, the acquisition of Australia-based hyperscale data centre platform AirTrunk by alternative asset manager Blackstone and investment management organisation CPP Investments for $24 billion was finalised.

Originally reported by law.com in September, the $24 billion acquisition was the biggest acquisition deal conducted in Australia in 2024 and amounted to the second-largest private capital merger and acquisition deal in Australian history, according to King & Wood Mallesons.

It was also the largest-ever data centre deal globally.

As suggested by Blackstone at the time, the deal was especially pertinent given expectations that, in the coming five years, there will be approximately US$1 trillion of capital expenditures in the United States to build and facilitate new data centres, with another US$1 trillion of capital expenditures outside the US.

Clayton Utz advised founder Robin Khuda from a tax perspective. Firm partner Brendon Lamers said that to see Khuda’s vision start to be realised “was a highlight of 2024”.

“AirTrunk has grown rapidly to date, and with Blackstone’s capital, [it] will grow even faster. This transaction shows the global depth of the private capital market to allow fast-growing capital-intensive businesses to flourish,” he said.

“Deals of this magnitude don’t come along very often, and the regulatory settings in Australia at the moment make them harder to close.”

Looking ahead, Lamers said that the firm sees more deals in the data centre space as likely, “given the rapid uptake in artificial intelligence use, US announced incentives and the asset class cuts across many attractive investment themes, including real estate, infrastructure and technology”.

Baker McKenzie advised Macquarie Asset Management and PSP Investments in the transaction. Partner Simon De Young, who is the co-lead of the firm’s transactional practice, noted that 2024’s M&A landscape saw good momentum in deal flow amid economic uncertainty fuelled by inflationary pressures, global elections, and conflicts.

“As demonstrated by the AirTrunk transaction, the burgeoning demand for data, cloud services and the adoption of artificial intelligence continued to drive transactions involving digital infrastructure assets,” he said.

“Looking forward into 2025, the combination of regulatory reforms, greater geopolitical certainty and strategic dealmaking is set to shape a dynamic year for M&A in Australia.

“While the full impact of the US election result is yet to play out, early reactions by markets both in Australia and abroad favour a positive outlook for M&A.”

KWM partner Alex Elser – whose firm represented Blackstone – said that despite some of the macro headwinds from 2024, the transaction “shows that digital infrastructure and other sectors which are in those areas like AI and energy transition are really insulated from any of those macro headwinds and, in fact, are active areas where very significant transactions are being done”.

“There is a lot of activity notwithstanding other global macro and political factors which might be making transactions more challenging in other areas such as consumer,” she said.

In 2025, Elser continued, the global firm expects to see continued attractiveness of sectors related to the AI revolution and energy transition and other aspects of digital infrastructure that are supported by the new economy.

“The transaction also shows that these sectors remain extremely attractive to private capital across the investing spectrum,” she said.

“We expect to see continued focus in these areas for the year ahead. Assuming that interest rates also come off, we also anticipate overall levels of market activity to stabilise.”

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