By Yantoultra Ngui and Roushni Nair
SINGAPORE, Feb 4 (Reuters) – A KKR and Singapore Telecommunications consortium will pay S$6.6 billion ($5.2 billion) in cash to take full control of ST Telemedia Global Data Centres (STT GDC), the companies said on Tuesday, in an intensifying race for AI capacity.
The deal gives the data centre operator an implied enterprise value of S$13.8 billion, based on the price the companies are paying for the 82% stake they do not already own.
The transaction is the largest in Singapore in four years and biggest ever data centres deal in Southeast Asia, reflecting the growing need for computing capacity, power access and scale as demand booms for artificial intelligence and cloud services.
Shares of Singtel opened 1.9% higher to hit a record S$4.95 and closed 1.0% higher at S$4.91, outperforming Singapore’s benchmark index, which ended 0.22% higher.
Founded in 2014 and headquartered in Singapore, STT GDC is a data centre platform with about 2.3 gigawatts of design capacity across 12 major markets in the Asia Pacific, the UK and Europe, providing co-location, connectivity and around-the-clock support services, the companies said.
Reuters reported in November that KKR and Singtel were in advanced talks to buy more than 80% of STT GDC in a deal that would give them full ownership.
Under the deal, the KKR-led consortium will acquire the remaining 82% stake in STT GDC from its founding shareholder, ST Telemedia, via STT Communications Ltd, an indirect wholly owned subsidiary of Temasek Holdings, the companies said.
On completion, KKR and Singtel will hold 75% and 25% respectively, taking into account the conversion of existing redeemable preference shares held by both investors, the companies said.
Phillip Securities Research’s head of research Paul Chew said the deal fits Singtel’s broader digital infrastructure push, and the transaction “creates a funnel for growth” beyond 2028.
“It cements Singtel as one of the largest data centre operators in Asia,” he said, adding that the deal’s valuation in the high teens on an EV-to-EBITDA basis looked “fair” given STT GDC’s growth pipeline and Asia exposure.
Maybank Securities Singapore analyst Hussaini Saifee said Singtel has “a right to play” in data centres given its long operating track record, connectivity infrastructure and experience running infrastructure heavy businesses.
“With STT GDC, Singtel will be one of the largest DC player in Asia Pac,” he said. “The combination gives Singtel, partners global scale plus capability to win larger, multi-market hyperscaler and AI opportunities.”
