Chinese-owned Global Switch to sell data center business for $11 billion
In what could be the largest deal in the data center segment, Chinese-owned Global Switch to sell business for $11 billion.
According to a Bloomberg exclusive, Global Switch is in preliminary talks to take the sale forward. The company is working with advisors and professionals to procure a sale from interested suitors, according to sources who requested anonymity, as the talks are private and in early stages.
Founded in 1998 and owned by Chinese steel maker Jiangsu Shagang Group Co., Global Switch is based in London and is also backed by Avic Trust Co., a trust firm with an investment portfolio that covers property, capital, and securities.
The sale needs to be seen in the backdrop of an attempt to list Global Switch in the Hong Kong markets in 2019, which was shelved. In August 2019, Shagang bought an additional 24 per cent stake for 1.8 billion pounds from British billionaires David and Simon Reuben. With the deal, Shagang became the largest shareholder. Global Switch and Shagang Group declined to comment on the matter.
Data Center sales on the rise
With this, Global Switch becomes one of many industry operators that are banking on the sharp rise in demand for data centers due to the pandemic.
In April 2020, global investment banking firm Macquarie acquired an 88% stake in Sydney-based AirTrunk for $3 billion, and the company simultaneously opened data centers in Hong Kong and Singapore, with a new hyperscale data center in Tokyo coming in late 2021. Additionally, Digital Realty Trust Inc bought InterXion Holding NV for $8.8 billion and this deal, if it goes through, could be one of the largest in the data center segment.
Global Switch was founded in 1998 and led by CEO John Corcoran, who owns and operates data centres in Europe and Asia Pacific. The company currently has around 390,000 square meters of space and hosts tech infrastructure of government organisations, financial institutions and mobile carriers, with annual revenues of $597 million (£439 million) in 2019.