Singtel and KKR to acquire ST Telemedia Global Data Centres amid AI-driven infrastructure surge

A consortium led by global investment firm KKR, including Singapore Telecommunications, is set to acquire ST Telemedia Global Data Centres in one of the largest digital infrastructure deals in Asia. The transaction will see KKR and Singtel take full ownership of the data centre operator by buying the 82% stake held by ST Telemedia, a subsidiary of Singapore’s state investment firm Temasek.

The acquisition is valued at US$6.6 billion in cash for the stake, giving STT GDC an enterprise value of US$13.8 billion, according to a 4 February filing by Singtel. Singtel will invest around US$740 million and hold a 25% stake upon completion of the deal, while KKR will control the remaining 75%. The two firms already owned smaller stakes in STT GDC before the transaction.

Singtel chief financial officer Arthur Lang said the deal marked a key step in building the company’s digital infrastructure ambitions. “This acquisition is a significant step towards scaling our new growth engine in digital infrastructure, as mapped out in our Singtel28 growth plan,” he said. “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.”

Singtel’s share price showed moderate volatility on the day of the announcement. The stock dipped 0.8% to S$4.82 at the midday trading break on 4 February, after earlier rising to S$4.95. It had climbed 5.9% over the previous two sessions on reports that a deal was imminent, before closing 1.03% higher at S$4.91.

KKR Asia Pacific co-head David Luboff highlighted the long-term appeal of digital infrastructure investments. “Digital infrastructure remains one of the most compelling long-term investment themes globally as cloud computing and data-rich applications continue to reshape how data is created, stored and processed,” he said. “STT GDC is well-positioned within this landscape, with a diversified footprint, strong development pipeline and a leadership team with a clear vision for global scale.”

AI boom fuels rapid expansion in data centre demand

The transaction comes as artificial intelligence continues to drive unprecedented demand for data centres worldwide. These facilities provide the computing power, storage and advanced cooling systems required to train and run large-scale AI models, making them critical to the technology sector’s growth.

Industry research firm JLL expects the global data centre market to grow at a compound annual growth rate of 15% through 2027, underlining the strategic value of assets such as STT GDC. Founded in 2014 by ST Telemedia, the company is headquartered in Singapore. It operates six data centres in its home market, with more than 100 facilities across 12 major markets in the Asia-Pacific region, Britain and Europe.

ST Telemedia president and group chief executive Stephen Miller said the sector’s rapid expansion had changed capital requirements for operators. “As the data centre sector has fundamentally shifted, its exponential trajectory now requires a different scale of capital and specialised focus for STT GDC’s next exciting phase of continued growth,” he said.

STT GDC president and group chief executive Bruno Lopez echoed the growth outlook, pointing to the consortium’s ability to accelerate expansion. “With the consortium’s global expertise, regional networks, financial strength and, most importantly, our shared ambition, STT GDC is poised to scale rapidly and capture the next wave of significant growth in cloud and AI demand,” he said.

Analysts broadly welcomed the transaction, citing its potential to strengthen Singtel’s position in digital infrastructure. RHB analysts maintained a “buy” recommendation on Singtel in a report released on 2 February, noting that the acquisition would bolster the company’s regional data centre business. “We view the development positively to strengthen its regional data centre business, a key growth engine benefiting from strong global artificial intelligence tailwinds,” they said.

The analysts also described the deal as the largest leveraged data centre buyout since Blackstone’s acquisition of Australia’s AirTrunk in 2024, highlighting its scale and strategic significance.

Strategic shift towards global digital infrastructure leadership

The acquisition will add to Singtel’s existing data centre operations under its Nxera brand, which includes three facilities in Singapore and additional sites in Malaysia, Indonesia and Thailand. The company has been pursuing both organic and inorganic expansion to capture the growing demand for high-performance computing infrastructure.

Arthur Lang said combining STT GDC with Singtel’s existing assets would transform the company’s digital infrastructure business. “When added to our portfolio of data centre assets that includes Nxera, in which KKR is also a capital partner, it meaningfully changes the business complexion of the group while creating new opportunities for capital optimisation and growth,” he said.

DBS analyst Sachin Mittal previously noted that Singtel was keen to expand its data centre portfolio through both acquisitions and internal development. He also highlighted the company’s efforts to upgrade facilities to support AI workloads, including testing high-power-density and liquid-cooling technologies to meet the demands of next-generation computing.

Temasek’s head of strategic initiatives, Ravi Lambah, welcomed the transition and said it aligned with the firm’s broader strategy. “We welcome the next chapter for STT GDC with KKR and Singtel, whose complementary strengths and shared vision are expected to accelerate STT GDC’s expansion and reinforce its leadership in digital infrastructure,” he said. “This transition reflects Temasek’s commitment to backing businesses that create enduring value and contribute to resilient, future-ready infrastructure for an AI-driven world.”

The deal underscores the intensifying competition among telecoms operators, private equity firms and cloud providers to secure data centre capacity. As AI applications continue to expand across industries, ownership of large-scale, globally distributed data centre platforms is increasingly seen as a strategic advantage.

With KKR taking majority control and Singtel maintaining a significant minority stake, the consortium aims to position STT GDC as a global leader in digital infrastructure, capitalising on the ongoing shift towards cloud computing and artificial intelligence-driven workloads.