KKR, Singtel buy STT GDC for S$6.6 billion in one of Asia’s largest data centre deals

[SINGAPORE] A KKR-led consortium, along with Singtel, will acquire Singapore-based ST Telemedia Global Data Centres (STT GDC) for S$6.6 billion.

The deal, one of the largest data-centre transactions in Asia, was announced by Singtel in a bourse filing on Wednesday (Feb 4).

The acquisition implies an enterprise value of S$13.8 billion for STT GDC, including leverage and capital expenditure for committed projects.

Through this deal, the consortium will be acquiring the remaining 82 per cent stake from STT GDC’s parent company ST Telemedia.

Upon completion, private equity giant KKR and Singtel will own stakes of 75 per cent and 25 per cent, respectively, in the company, taking into account the conversion of existing redeemable preference shares that both companies hold in STT GDC.

Singtel will be contributing S$740 million in cash, the group said.

Shares of Singtel opened at S$4.95, up 1.9 per cent or S$0.09 higher from Tuesday, but later turned direction to decline 0.41 per cent. The day before, its shares surged to close 4.7 per cent up.

The Business Times understands that sovereign wealth funds GIC and Mubadala will be involved as indirect minority investors.

Prior to the transaction, a KKR-led consortium bought about 18 per cent of STT GDC shares in 2024 with Singtel. This resulted in KKR and Singtel holding about 14 per cent and 4 per cent of shares, respectively, in the company.

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With this deal, Singtel leapfrogs its competitors and becomes a top-tier Asian player in the data centre space.

It comes as demand for data centres is reaching an all-time high, with companies increasing their reliance on data centres to train and develop artificial intelligence models.

STT GDC has a pipeline of more than 100 data centres in over 20 markets worldwide – including Singapore, Germany and Malaysia – with a total IT load of 2.3 gigawatts (GW).

The IT load refers to the total core energy demand that infrastructure systems needs to support.

“STT GDC is well-positioned within (the digital infrastructure landscape), with a diversified footprint, strong development pipeline and a leadership team with a clear vision for global scale,” noted David Luboff, co-head of KKR Asia-Pacific and head of Asia-Pacific infrastructure at KKR.

The transaction is expected to close in the early part of the first half of 2026.

Regional commitment solidified

This deal marks the latest move by KKR and Singtel in Asia’s data centre sector.

In 2023, KKR invested up to S$1.1 billion for a 20 per cent stake in Singtel’s regional data centre business. This deal put the enterprise value of Singtel’s overall regional data centre business at S$5.5 billion.

The same deal will allow KKR to increase its stake to 25 per cent by 2027 at the pre-agreed valuation.

KKR noted in its third quarter earnings in November last year that it still has US$126 billion in unspent capital.

The company’s investment in the data centre industry is part of its strategy to invest in digital infrastructure. Excluding the current transaction, it has 23 investments and over US$31 billion equity invested across data centres, fibre and mobile worldwide.

Currently, Singtel’s data centre arm – Nxera – has data centres operating in Singapore and Thailand, with others in Indonesia and Malaysia in the pipeline.

Its IT load is expected to increase from 200 megawatt (MW) in 2026, to over 400 MW in the mid-term.

Nxera and STT GDC will continue operating independently, with the former focusing on “next-generation” AI-ready infrastructure, while STT GDC will focus on the global scale cloud infrastructure-backbone with next generation AI capabilities, Singtel added.

Cumulatively, the data centre operators will have about 2.8 GW of design capacity, based on total design capacity and pipeline.

“This acquisition is a significant step towards scaling our new growth engine in digital infrastructure as mapped out in our Singtel28 growth plan,” said Arthur Lang, group chief financial officer at Singtel, referencing the three-year growth plan to deliver sustained shareholder value that started in 2024.

He added that the dividend and growth plan for Singtel28 remains intact.

This transaction is expected to have minimal impact on Singtel’s financial position.

STT GDC is expected to unlock more capital through this deal.

In 2024, Michael Tanujaya, head of investments and strategy at STT GDC, noted that private equity firms have been sitting on “dry powder” – or unspent capital – for a period of time.

The exponential trajectory of the data centre sector now requires a “different scale of capital” for STT GDC’s next phase of growth, said Stephen Miller, president and group chief executive officer of ST Telemedia.

“We welcome the next chapter for STT GDC with KKR and Singtel,” said Ravi Lambah, head of strategic initiatives at Temasek, which is the majority-owner of Singtel and also wholly owns ST Telemedia.

“As a long-term shareholder of STT, Temasek has supported ST Telemedia and STT GDC’s management teams and invested across multiple stages of ST Telemedia’s growth journey, helping to build a strong foundation for STT GDC’s next wave of opportunities,” he added.