KKR, Singtel to fully own data centre powerhouse STT GDC for $6.6 billion amid AI boom

SINGAPORE – A consortium comprising Singtel and led by global investment firm KKR is taking full ownership of ST Telemedia Global Data Centres (STT GDC) in one of Asia’s largest digital infrastructure transactions.

KKR and Singtel will buy Temasek subsidiary ST Telemedia’s 82 per cent stake in STT GDC for $6.6 billion in cash. KKR and Singtel already own about 14 per cent and 4 per cent of STT GDC, respectively.

The deal gives STT GDC an enterprise value of $13.8 billion, Singtel announced in a Singapore Exchange filing on Feb 4.

Singtel will invest about $740 million in the transaction and hold a 25 per cent stake in the company after the deal is completed. KKR will own the remaining 75 per cent.

Mr Arthur Lang, Singtel’s group chief financial officer, said: “This acquisition is a significant step towards scaling our new growth engine in digital infrastructure, as mapped out in our Singtel28 growth plan.

“STT GDC’s diverse geographical footprint increases our exposure to new markets and makes the Singtel Group a stronger data centre player with global reach.”

Singtel shares were down 0.8 per cent to $4.82 at the midday trading break on Feb 4, after rising as much as 1.85 per cent to $4.95 earlier in the morning. The stock had gained 5.9 per cent over the previous two days on reports of an imminent deal.

It eventually closed 1.03 per cent higher at $4.91 on Feb 4.

KKR Asia Pacific co-head David Luboff, who is also head of Asia Pacific Infrastructure, said: “Digital infrastructure remains one of the most compelling long-term investment themes globally as cloud computing and data-rich applications continue to reshape how data is created, stored and processed.

“STT GDC is well-positioned within this landscape, with a diversified footprint, strong development pipeline and a leadership team with a clear vision for global scale.”

The artificial intelligence (AI) boom is driving an unprecedented expansion in demand for data centres, which provide the massive computing power, storage and advanced cooling infrastructure needed to train and run large-scale AI models.

JLL Research expects the global data centre market to expand at a compound annual growth rate of 15 per cent through 2027.

STT GDC was founded in 2014 by ST Telemedia and is based in Singapore, where it has six data centres.

In total, it operates more than 100 data centres across 12 major markets in the Asia-Pacific, Britain and Europe.

ST Telemedia president and group chief executive Stephen Miller said: “As the data centre sector has fundamentally shifted, its exponential trajectory now requires a different scale of capital and specialised focus for STT GDC’s next exciting phase of continued growth.”

STT GDC president and group chief executive Bruno Lopez said: “With the consortium’s global expertise, regional networks, financial strength and, most importantly, our shared ambition, STT GDC is poised to scale rapidly and capture the next wave of significant growth in cloud and AI demand.”

RHB analysts maintained a “buy” call on Singtel in a report released on Feb 2, after media reports of advanced talks to acquire STT GDC.

“We view the development positively to strengthen its regional data centre business, a key growth engine benefiting from strong global artificial intelligence tailwinds,” the analysts said, adding that the deal is set to be the biggest leveraged data centre buyout deal since Blackstone’s A$24 billion (S$21.4 billion) acquisition of Australia’s AirTrunk in 2024.

“We are positive on this development as it would transform Singtel into a data centre powerhouse with a global footprint,” the analysts noted.

“The transaction resonates well with management’s focus on growing the regional data centre business under the digital infrastructure company pillar – a key growth engine.”

DBS analyst Sachin Mittal said in a November report that Singtel is keen to expand its data centre portfolio organically and inorganically. “Singtel is also testing the technology to transform existing data centres into AI data centres with high power density and liquid cooling,” he added.

Singtel’s STT GDC acquisition adds to its existing data centre business, Nxera, which has three facilities in Singapore and one each in Malaysia, Indonesia and Thailand.

Mr Lang said: “When added to our portfolio of data centre assets that includes Nxera, in which KKR is also a capital partner, it meaningfully changes the business complexion of the group while creating new opportunities for capital optimisation and growth.”

Citi, which provided acquisition financing, said it is the largest Singapore merger and acquisition deal in the last four years and South-east Asia’s largest data centre transaction.

Mr Ravi Lambah, Temasek’s head of strategic initiatives, said: “We welcome the next chapter for STT GDC with KKR and Singtel, whose complementary strengths and shared vision are expected to accelerate STT GDC’s expansion and reinforce its leadership in digital infrastructure.

“This transition reflects Temasek’s commitment to backing businesses that create enduring value and contribute to resilient, future-ready infrastructure for an AI-driven world.”