Post by : Badri Ariffin

Global investors are sharpening their focus on Asia's digital backbone as KKR & Co and Singapore Telecommunications (Singtel) move toward acquiring a majority stake in ST Telemedia Global Data Centres (STT GDC) in a transaction that sources say could exceed S$5 billion (about US$3.9 billion).

Deal snapshot and players:

• KKR currently owns roughly 14% of STT GDC, while Singtel holds just over 4%. The remaining shares are controlled by ST Telemedia, which is fully owned by state investor Temasek Holdings.

• The parties are negotiating to acquire in excess of 80% of STT GDC, a level that would transfer effective control to the buyers.

• Insiders describe the valuation as "over S$5 billion."

• Earlier this year in June 2024, KKR and Singtel jointly put S$1.75 billion (roughly US$1.3 billion) into STT GDC through a consortium, marking a major Southeast Asian infrastructure investment for the year.

Why the transaction is significant:

• STT GDC runs more than 100 data centres across some 20-plus key markets, including nations across Asia (India, Japan, Singapore, South Korea) and Europe (UK, Germany, Italy).

• Surging demand for AI-ready infrastructure, cloud platforms and colocation services is driving rapid expansion in Asia's data-centre sector; STT GDC is well placed to benefit from this trend.

• If completed, the deal would move KKR and Singtel from minority stakeholders to owners of one of the region's most scalable digital-infrastructure networks.

Context & possible implications:

• A transaction at this scale would rank among the largest data-centre deals in Asia, underscoring a shift toward investing in digital backbone assets.

• For Singtel, the purchase would deepen its push into infrastructure beyond pure telecoms, supporting broader cloud and data-service ambitions.

• For KKR, the acquisition fits a strategy focused on long-duration infrastructure with predictable cash flows and growth tied to data demand.

• The agreement remains subject to final negotiations and regulatory sign-offs; while discussions are advanced, timing could change or talks could stall.

Key numbers at a glance:

• Deal size: Over S$5 billion (~US$3.9 billion) for a stake exceeding 80%.

• Existing KKR stake: ~14%.

• Existing Singtel stake: >4%.

• Prior 2024 investment by KKR‑Singtel: S$1.75 billion.

In summary, the prospective takeover of STT GDC by KKR and Singtel would be a strategic bet on Asia's expanding digital infrastructure. As AI, cloud and enterprise workloads continue to drive capacity needs, control of a major regional platform could prove strategically valuable. Observers will be watching how integration, regulation and competitive dynamics influence the final outcome.

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