Singtel and KKR Invest $1.3 Billion in ST Telemedia GDC

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Singtel and KKR are set to invest $1.3 billion for a minority stake in ST Telemedia Global Data Centres (STT GDC), marking the latest significant investment in the data center sector. The companies will initially acquire S$1.75 billion (US$1.3 billion) in redeemable preference shares and warrants, with a plan to invest an additional S$1.24 billion once the warrants are fully exercised.

Post-transaction, ST Telemedia, a Singapore-based investment firm focusing on communications, media, infrastructure, and data centers, will remain the majority shareholder of STT GDC. The investment will result in KKR and Singtel holding an 18.3% stake in STT GDC, with KKR owning 14.1% and Singtel 4.2%.

The consortium’s selection followed a competitive process considering their expertise, financial strength, and strategic vision. The investment aims to bolster STT GDC’s presence in its current markets, which include Singapore, the UK, Germany, India, Thailand, South Korea, Indonesia, Japan, the Philippines, Malaysia, and Vietnam, and support its international expansion plans, potentially through mergers and acquisitions.

KKR and Singtel were strong contenders for the investment, given their existing relationships. Singtel and ST Telemedia are both owned by Singapore’s Temasek, and KKR previously acquired a 20% stake in Singtel’s data center operations for S$1.1 billion.

David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure, highlighted the growth potential of STT GDC, noting the opportunity to enhance their collaboration with Singtel. Arthur Lang, Singtel’s Group Chief Financial Officer, emphasized the rapid growth of the data center sector driven by digitalization and AI adoption.

The data center industry has seen a surge in investments recently. Microsoft announced the launch of its first cloud region in Spain as part of a broader $2.1 billion investment, with plans to spend an additional $7 billion over the next decade. Similarly, New Zealand’s Infratil is raising NZ$1.15 billion for further investment in data center operator CDC, and Africa Data Centres secured $110 million for expansion.

Singtel, KKR, and ST Telemedia’s deal is currently the largest digital infrastructure investment in Southeast Asia this year, although the rapidly evolving sector may soon see even larger investments.

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