Singapore Telecommunications (Singtel) has announced a deal to sell a 20% stake in its regional data center business to U.S. private equity firm KKR for S$1.1 billion ($807 million). This investment represents KKR’s largest foray into Southeast Asian and global data center infrastructure. The deal values Singtel’s data center unit at S$5.5 billion. The transaction is expected to be finalized by the fourth quarter, allowing Singtel to unlock value in its data center assets.
Singtel plans to use the proceeds from the sale to expand its data center business in Southeast Asia. Targeted countries include Singapore, Indonesia, and Thailand, with possibilities of exploring new markets, including Malaysia. KKR also holds an option to increase its stake in the data center business to 25% by 2027.
Both Singtel and KKR predict that the Southeast Asian data center market will experience significant growth over the next five years, projecting a 17% increase. Investments in the region’s data center market during this period could range from $9 billion to $13 billion.
Singtel’s strategic move to sell a stake in its data center business is part of an initiative that has already yielded more than S$6 billion. The telecom operator aims to tap into the growing demand for data center capabilities and expand its presence in the region.
Singtel’s partnership with KKR not only brings significant investment but also deepens the telecom operator’s expertise in data center infrastructure. The collaboration will position Singtel for further expansions and investments in the sector as demand continues to grow in the Southeast Asian market.