KKR and Singtel Partner on £3.8 Billion STT GDC Deal

Global investment firm KKR and Singapore Telecommunications have agreed to pay £3.8 billion ($5.2 billion) for STT GDC, one of the largest data centre deals in Southeast Asia.

KKR and Singtel have combined resources to purchase STT GDC for £3.8 billion ($5.2 billion), based on a valuation of £7.96 billion ($10.8 billion). The deal, expected to close mid-year, will provide KKR with 75% ownership and Singtel with the remaining 25%.

The cash consideration will be divided into two equal payments. Half will be due at closing, and the remaining amount will be paid one year later. Singtel said it does not expect this transaction, large as it is, to have a material impact on its credit rating.

Transaction Consolidates Ownership

The two companies first invested in STT GDC in June 2024, spending £1 billion ($1.3 billion), which resulted in the KKR/Singtel consortium owning 18% of the company. The latest transaction transfers ownership of the entire business to KKR and Singtel.

Speaking with Reuters, Singapore Analyst Hussaini Saifee said, “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.”

David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure at KKR, said, “This transaction represents a rare opportunity to further support a high-quality platform and deepen our strategic partnership with Singtel. We look forward to deploying KKR’s global network and deep digital infrastructure expertise to help STT GDC accelerate its next phase of sustainable, international growth.”

STT GDC was founded in 2014 by ST Telemedia and is based in Singapore, operating more than 100 data centres across 12 major markets in the Asia-Pacific, Britain, and Europe.

Raj Agrawal, Global Head of Real Assets for KKR, recently cautioned investors about the dangers of unrestrained AI investment. Agrawal said that these expensive projects might be moving faster than the underlying economic support, and that investors may never realise the returns they’re looking for. To that end, he said, KKR is framing its infrastructure investments around flexibility – focusing on sites in Tier One locations that can be used for a variety of purposes instead of those that are locked into one customer’s design.

Deal Fits KKR’s Disciplined Infrastructure Strategy

In line with this strategy, KKR recently invested in Compass Datacentres, a Brookfield-owned data centre company looking to raise funds to build new facilities to expand its portfolio. The company purchased CyrusOne Data Centres in 2021 for $15bn and CoolIT, a liquid cooling company, in 2023.

Arthur Lang, Group Chief Financial Officer of Singtel, noted that the acquisition of STT GDC is in line with the company’s growth strategy, known as Singtel28.
“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,” he said. “We will continue to exercise discipline in capital allocation and evaluate capital recycling alternatives to fund growth and maintain balance sheet efficiency. Our dividend and growth plans under Singtel28 remain intact.”

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