KKR acquires 20% stake in Singtel’s data centre business

KKR acquires 20% stake in Singtel’s data centre business

Commits up to $800 million.

Bill Chang (Singtel)

Bill Chang (Singtel)

Credit: Singtel

Global investment firm KKR is spending over S$1.1 billion (US$800 million) to acquire a 20 per cent stake in Singtel’s regional data centre business.

According to the definitive agreement, KKR will have the option to increase its stake to 25 per cent by 2027 at the pre-agreed valuation.

The Singapore-based telco’s overall data centre business is said to be valued at S$5.5 billion.

The collaboration is a first between Singtel and KKR and aimed at “widening the business' strategic choices”.

In addition to capital, Singtel aims to tap onto KKR’s expertise investing in data centres and telecommunication infrastructure globally, while KKR is making this the investment as part of its Asia infrastructure strategy.

The telco plans to use the proceeds from this transaction to accelerate the expansion of the regional data centre business across ASEAN markets including Singapore, Indonesia and Thailand, while exploring markets like Malaysia.

Singtel’s regional data centre business is part of the Digital InfraCo unit which was formed in June 2023.

“KKR's investment underscores the quality of our data centre portfolio and confidence in our plans to scale the business by capitalising on the digitalisation and rapid AI adoption that is transforming this region,” said Bill Chang, CEO of Singtel's Digital InfraCo.

“Our expertise in designing, building and operating data centres and our connectivity leadership in the region together with KKR's strong track record in supporting digital infrastructure assets and its platform-building expertise makes for a powerful combination.

“We look forward to building on the strong momentum we have achieved to grow the business into one of the region's leading green and sustainable data centre platforms with rich hyper-connectivity services.”

David Luboff, partner and head of Asia Pacific Infrastructure at KKR, said “robust digital infrastructure, including high-quality data centres", is expected to play a "crucial" role in Southeast Asia's digital economy in the future.

"Singapore is well-placed to serve as a central hub for the region," he said.

“We look forward to working closely with Bill, Arthur and Singtel’s talented team to meet this tremendous demand and sharing our global expertise and network to accelerate the platform’s growth across the region.”

The transaction is expected to be completed by the fourth quarter of 2023, subject to regulatory approvals and customary closing conditions.

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