Singapore Telecommunications (SingTel) announced on Monday that US global investment firm KKR will be buying a 20% stake in its regional data center arm, in a deal worth $1.1bn (US$807mn). The acquisition, which is due to be completed in the fourth quarter of 2023, puts the enterprise value of SingTel’s overall regional DC business at $5.5bn (US$4bn).
In a joint statement, the companies said the funds will be used to expand SingTel’s current data center business across Southeast Asia, including Singapore and Thailand, as well as allowing for potential investment in new markets such as Malaysia.
The move comes as part of KKR’s broader investment in telecoms and DC infrastructure across the region, something it sees as ever more necessary with the growth of generative artificial intelligence (AI).
The deal is structured in such a way that it will allow KKR to increase its stake to 25% at a pre-agreed value, by 2027 if it so wishes. Both SingTel and KKR have highlighted the synergistic benefits of the acquisition, with the US giant’s expertise in DC and telecommunications investment set to pair well with SingTel’s regional ties and established portfolio.
SingTel says that this data center portfolio, which comes under its Digital InfraCo business unit, is set to expand to 155 megawatts (MW) in 2025, from its current 62MW existing capacity, with the potential to grow even further to 200MW.
