KKR’s Major Investment in Southeast Asian Infrastructure

KKR, a global investment firm, is set to acquire a 20% stake in the data centre business of Singapore Telecommunications (Singtel), Southeast Asia’s largest telecom operator, for S$1.1 billion ($807 million). This marks KKR’s most significant investment in Southeast Asian infrastructure and data centre infrastructure globally.

Valuation of Singtel’s Data Centre Business

The deal assigns a valuation of S$5.5 billion ($4.03 billion) to Singtel’s entire regional data centre business. This information was released in a press statement by the company.

Singtel’s Strategic Business Unit

Singtel’s data centre business, housed within its newly formed Digital InfraCo unit as of June this year, operates across Singapore, India, and Thailand. The proceeds from this deal are earmarked for the expansion of Singtel’s data centre operations in Southeast Asia.

Leadership’s Perspective on the Investment

Bill Chang, CEO of Singtel’s Digital InfraCo, emphasized that KKR’s investment acknowledges the quality of their data centre portfolio and confidence in their expansion strategy. Arthur Lang, Singtel’s Chief Financial Officer, highlighted KKR’s credibility in the data centre space and expressed enthusiasm for the strategic partnership aimed at scaling the business.

Singtel’s Focus on Shareholder Value

The investment by KKR is seen as a move to crystallize the latent value of Singtel’s data centre assets. Chang noted that this investment, along with other initiatives since their strategic reset two years ago, has unlocked more than S$6 billion, demonstrating Singtel’s commitment to delivering shareholder value.

KKR’s Expansion and Future Options

For KKR, this investment aligns with its broader Asian infrastructure strategy. The firm also retains the option to increase its stake in Singtel’s data centre business to 25% by 2027.

Regulatory Approval and Closing Timeline

The transaction is subject to regulatory approval and is anticipated to be finalized by the end of the year.

KKR’s Telecommunications Investment History

KKR has a history of significant investments in telecoms infrastructure. Notably, last year, KKR and Global Infrastructure Partners (GIP) acquired data centre provider CyrusOne in a $15 billion deal. They also jointly purchased an 81.7% stake in Vodafone’s telecom tower spin-off, Vantage Towers. More recently, KKR made headlines as a potential buyer for Telecom Italia’s network assets, following a rejected takeover bid in 2021.