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May 29, 2024

KKR-SingTel Consortium Leading Bid for $1 Billion Stake in STT GDC

A consortium comprising US investment firm KKR and Singapore Telecommunications (SingTel) has emerged as the leading candidate to acquire a minority stake valued at $1 billion in one of Asia’s largest data centre providers, STT Telemedia Global Data Centres (STT GDC), according to sources.

The KKR-SingTel consortium is vying with New York-based alternative investment firm Stonepeak for up to a 20% stake in STT GDC. A deal could be finalized or announced by early June, the sources indicated. However, they requested anonymity as the information is not yet public.

KKR declined to comment on the matter, while SingTel, in a filing with the local stock exchange, stated that it regularly evaluates business opportunities and engages in discussions with various parties. SingTel emphasized that such discussions do not guarantee that a transaction will occur or that any definitive agreement will be reached. STT and Stonepeak did not respond to requests for comment.

The potential investment in STT GDC underscores the growing demand for data centres across the Asia Pacific region, driven by the surge in artificial intelligence applications and the corresponding need for robust data infrastructure. This trend highlights the strategic importance of data centres as nations and companies adapt to technological advancements.

In a related development, KKR acquired a 20% stake in SingTel’s regional data centre business last year for S$1.1 billion (approximately $816 million). Furthermore, in February, KKR announced it had raised $6.4 billion for a fund dedicated to Asia-Pacific infrastructure and energy-related assets.

Founded in 2014, STT GDC has rapidly expanded its operations, establishing a presence in Singapore, the UK, Germany, India, Thailand, South Korea, Indonesia, Japan, the Philippines, Malaysia, and Vietnam. ST Telemedia, the parent company of STT GDC, is a strategic investor headquartered in Singapore with a focus on communications and data centre assets. It is wholly owned by Singapore state investment firm Temasek Holdings.

This potential deal reflects a broader trend of increasing investment in data infrastructure within the Asia Pacific region. As artificial intelligence and other data-intensive technologies continue to proliferate, the demand for advanced data centres is expected to rise, attracting significant interest from global investors.

In summary, the KKR-SingTel consortium is currently leading the race to secure a $1 billion stake in STT GDC, highlighting the escalating value and importance of data centre assets in the modern digital economy. This move aligns with KKR’s strategy to invest in key infrastructure assets across the Asia Pacific, positioning both KKR and SingTel at the forefront of the region’s data infrastructure growth.

Jhumpa Lahiri

Jhumpa Lahiri

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