Singapore Telecommunications Expands Data Centre Portfolio with Strategic GDC Acquisition February 13, 2026
Major Transaction Details
Singapore Telecommunications Ltd (Singtel) has announced a significant expansion of its data centre operations through a strategic partnership with KKR. The two companies will jointly acquire the remaining 81.7% stake in ST Telemedia Global Data Centres (GDC) for S$6.6 billion in cash. Under this arrangement, Singtel will hold a 25% stake while KKR will control 75% of GDC. The transaction is expected to complete in the second half of 2026 and requires no shareholder approval, with Singtel funding its portion through debt and internal cash resources.
Company and Asset Overview
Singapore Telecommunications is a leading telecommunications company that continues to diversify its portfolio beyond traditional telecom services. GDC represents a substantial data centre platform operating 50 facilities across 12 countries with a combined power capacity of 673MW. As of December 2024, GDC maintained a book value of S$5.3 billion, though the company reported a net loss of S$185 million for the year. Despite the loss, GDC generated an estimated EBITDA of S$346 million, indicating operational cash flow generation capabilities.
Investment Merits and Growth Potential
The acquisition is positioned as a growth catalyst for Singtel following the completion of its ST28 strategic plan. The Asia-Pacific data centre market remains structurally underpenetrated, offering substantial long-term expansion opportunities. GDC’s development pipeline includes projects that could potentially triple its existing capacity, providing a clear runway for growth. The expanded footprint across multiple countries provides customers with enhanced geopolitical resilience and reduced redundancy risks.
Additionally, there exists potential for value enhancement through selective listing of Asian assets. The scaling up of Singtel’s data centre operations creates a more robust platform with a pipeline of 1.7GW, which doubles the combined capacity of Singtel’s existing Nxera and GDC operations totaling 819MW.
Financial Impact and Recommendation
The proforma financial impact on Singtel’s net earnings is minimal at less than 1%. While GDC’s current loss-making status means no immediate earnings contribution, the long-term prospects for earnings and cash flow growth from additional data centres remain promising.
Phillip Securities Research maintains an ACCUMULATE recommendation on Singapore Telecommunications, with an unchanged target price of S$5.35. The acquisition is viewed as a strategically positive move that positions the Group for sustained growth beyond its ST28 roadmap.
Key Takeaways
Q: What is the total value of the GDC acquisition and how is ownership structured?
A: Singtel and KKR will jointly acquire the remaining 81.7% stake in GDC for S$6.6 billion in cash. Upon completion, KKR will hold a 75% stake, while Singtel will own the remaining 25%.
Q: When is the transaction expected to complete?
A: The transaction is expected to be completed in the second half of 2026, and does not require shareholder approval.
Q: What is GDC’s current operational scale?
A: GDC operates 50 data centres across 12 countries with a total power capacity of 673MW and a book value of S$5.3 billion as of December 2024.
Q: How did GDC perform financially in 2024?
A: GDC reported a net loss of S$185 million for the year ended December 2024, though it generated an estimated EBITDA of S$346 million.
Q: What growth potential does this acquisition offer?
A: GDC has a development pipeline that could potentially triple its existing capacity. Post-acquisition, the combined pipeline of Singtel’s Nxera and GDC operations totals approximately 1.7GW, more than doubling current installed capacity.
Q: What are the main benefits of this acquisition?
A: The acquisition significantly scales up Singtel’s data centre footprint across multiple countries, offers customers greater geopolitical resilience, reduces redundancy, and positions the company in the underpenetrated Asia-Pacific data centre market.
Q: What is Phillip Securities Research’s recommendation on Singtel?
A: Phillip Securities Research maintains an ACCUMULATE recommendation with an unchanged target price of S$5.35.
Q: What are the potential drawbacks of this deal?
A: Key risks include the lack of immediate earnings contribution due to GDC’s current loss-making position, as well as relatively elevated valuations compared with listed US data centre peers, which trade at approximately 22x EV/EBITDA.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Paul Chew
Paul has more than 25 years of experience as a fund manager and sell-side analyst. He currently covers sectors such as healthcare, electronics, telecommunications, conglomerates, small caps, and strategy.
He graduated from Monash University and has completed both his Chartered Financial Analyst and Australian CPA programme.
