If the deal goes ahead, it will be the biggest leveraged data centre buyout deal since Blackstone’s A$24 billion acquisition of Australia’s AirTrunk in 2024.
KKR and Singtel already own 18.3% of STTT GDC after spending more than US$1.3 billion in a 2024 deal.
RHB calls this deal "highly synergistic" and views it positively.
Assuming the previous investment ratio is maintained relative to KKR, RHB estimates that the latest acquisition could potentially see Singtel paying around $2 billion for its share.
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Singtel should have "little issue" funding this deal, with its November 2025 proceeds of more than $1.5 billion from divesting another 0.8% in Bharti Airtel, plus another $4.1 billion in capital recycled throughout FY2025, says RHB.
"We are positive on this development as it would transform Singtel into a data centre powerhouse with a global footprint," says RHB.
Besides Singtel's own planned and existing data centre capacity of 200MW, STT GDC has more than 2GW in its portfolio, spread across around 100 data centres in 20 markets.
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"The transaction resonates well with (Singtel's) focus on growing the regional data centre business under the digital infrastructure company pillar – a key growth engine," says RHB.
For RHB, Singtel remains its "preferred" Singapore telco exposure.
"After the sterling share performance in 2025, we see continuing positive earnings execution, capital management, market price reparation, and value realisation share buy-back programme driving further share price re-ratings going forward," says RHB.
Singtel shares gained 1.74% to trade at 4.67 as at 9.35 am, extending a gain of more than 45% in the past year.
