Temasek subsidiary to buy Indian, Singapore data centres

The $632m deal will see the $193bn sovereign fund own 14 facilities across both countries.

Singapore Technologies Telemedia, a wholly-owned subsidiary of sovereign wealth fund Temasek, will acquire a majority stake in Tata Communications’ data centre businesses in India and Singapore. 

The transaction will value the respective units at INR31.3 billion ($464 million; €413 million) and SGD232.4 million ($168 million; €150 million), according to a filing with India’s Stock Exchange. 

Upon deal completion, ST Telemedia will hold a 74 percent stake in the newly formed joint venture. Tata Communications will continue to own the remainder. 

The acquired businesses include 14 data centres in key cities across India and three Singapore facilities. The data centres currently serve a diversified customer base, covering blue-chip enterprises in Asia, e-commerce platforms and multinational corporations, according to a statement. 

The Singapore company will co-invest alongside Tata Communications to pursue opportunities for expansion in the two markets. “With this investment, ST Telemedia is well positioned to become one of the largest Asian-headquartered data centre companies with significant platforms in key markets where we continue to see strong growth,” said Bruno Lopez, chief executive of ST Telemedia. 

Temasek has previously invested in several other telecommunications companies, including Singapore Telecommunications and New Delhi-headquartered Bharti Airtel. 

“Our new partnership gives us the opportunity to redeploy capital behind other areas of our business, to further broaden the portfolio of services we can offer to meet our customers’ current and future requirements,” said Vinod Kumar, managing director and chief executive of Tata Communications. 

Part of the Tata Group, India’s biggest conglomerate, Tata Communications owns the world's largest submarine cable network as well as nearly 1 million square feet of data centre and colocation space globally. 

In addition to data centres, mobile towers have also proved popular assets in the telecom sector in India. 

Last December, Tillman Global and TPG, two US buyout firms, acquired Reliance Communications’ 43,500 towers for an estimated value of $3.35 billion. That followed the $1.2 billion purchase of a 51 percent stake in Viom Networks by American Tower Corporation in October. Viom Networks owns and operates about 42,200 wireless communications towers and 200 indoor distributed antenna systems across the country.