KKR (KKR.US) buys 20% stake in Singtel's data center division for 800 million US dollars

Zhitong Finance ·  09/18 09:35

The Zhitong Finance App learned,private equity firmsKKR (KKR.US) bought 20% of Singapore Telecom's data center division for up to S$1.1 billion (US$807 million). This is KKR's latest bet on digital infrastructure in Asia.

KKRIt said in a statement that by 2027, it will have the right to choose to increase its shares in the Singapore Telecom subsidiary to 25%. According to this deal, the corporate value of the Singtel subsidiary is about S$5.5 billion. Singapore's largest telecom operator will use this funding to fund its expansion in Southeast Asia and enter new markets such as Malaysia.

KKR is one of the region's largest investors in the area of server networks and pipelines needed to power the internet and train the next generation of artificial intelligence services. Demand for artificial intelligence services is soaring after OpenAI launched ChatGPT.

KKRIt raised $3.9 billion for its first Asia-Pacific infrastructure fund around 2021, accumulating one of the largest pools in the region, which can be invested in everything from renewable energy to communication towers. Digital activity surged during the pandemic, although internet valuations declined as the pandemic subsided. The company's past investments include Electric Power India and Pinnacle Towers, a leading electricity producer and telecom operator in the Philippines.

Over the past few years, global private equity firms have moved from focusing on acquisitions to investment firms with portfolios of alternative assets such as infrastructure and real estate. They found people willing to accept it in Asian governments, which needed private capital to finance airports, toll roads, and utilities.

KKR and Singtel said in a joint statement that the regional data center market is expected to grow by an average of 17% over the next five years, attracting $9 billion to $13 billion in investment during this period. They expect the deal to close around the end of 2023.

The translation is provided by third-party software.

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