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NTT plans to buy German data centre operator e-shelter

Mon 2 Mar 2015

NTT, the Japanese telecom giant, is in talks to acquire the German data centre operator e-shelter for around 100bn yen (approx. £543mn), looking to take advantage of growing European storage and processing demand amid concerns surrounding US surveillance.

The move by Nippon Telegraph & Telephone comes as the Japanese business struggles in a slow domestic telco market and is starting to look overseas to push its future growth strategy. In December 2010, the Tokyo-based firm bought the multinational South African IT group, Dimension Data for approximately 290bn yen (approx. £1.6bn).

In 2013, NTT acquired two US cloud computing firms, Virtela Technology Services and 80% of RagingWire Data, for a combined value of 85.5bn yen. In October 2014, a majority share of Singapore’s Pro-Matrix was also bought by NTT.

e-shelter, founded in 2000, operates data centres across Austria and Switzerland, in addition to its German facilities in Hamburg, Berlin, Frankfurt and Munich. The company is currently building a new €140mn data centre in Vienna comprising of over 24,000 sq.m. of gross floor space and a total of 8,400 sq.m. data centre space spread over three buildings. The facility is expected to open in June 2015, exactly a year after construction started in 2014.

e-shelter has faced difficulties with a recent legal battle over the construction of a data centre in Unterschleissheim, north of Munich after a local trout farmer complained that a proposed groundwater cooling system would harm his fish. The final hearing on the lawsuit is scheduled for Tuesday 3rd March.

The unlisted operator currently controls around 90,000 sq.m. of floor space in total. Figures released last year revealed that NTT’s global data centre portfolio boasted the most floor space in the world, owning about 1mn sq.m.

NTT is expected to confirm the deal “in the near future” – an opportunity which is expected to help push e-shelter away from its closest competitor, Equinix.

Nippon Telegraph & Telephone saw its shares rise 2.3% over the weekend following the news that the company was in late-stage talks on the e-shelter acquisition.

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