Quick Read
- Singtel shares rose significantly on February 3, 2026, on news of advanced talks for a major data centre acquisition.
- Singtel is in discussions to join a KKR-led consortium to acquire ST Telemedia Global Data Centres (STT GDC) in a deal valued over S$13 billion (US$10 billion).
- The potential acquisition could transform Singtel into a global data centre powerhouse, expanding its presence in AI-ready infrastructure.
- No binding agreement has been reached yet, and the deal’s finalization is not guaranteed.
- Analysts view the move as a strategic pivot to diversify growth beyond traditional telco services.
SINGAPORE (Azat TV) – Shares of Singapore Telecommunications (Singtel) experienced a notable surge on the Singapore Exchange (SGX) on February 3, 2026, after the company confirmed it is in advanced discussions to join a KKR-led consortium. The consortium is reportedly pursuing the acquisition of ST Telemedia Global Data Centres (STT GDC), a deal valued at over S$13 billion (approximately US$10 billion), which could significantly bolster Singtel’s footprint in the burgeoning data centre market.
The announcement propelled Singtel’s stock higher, with shares trading at S$4.64, up 1.1% on the day, reaching an intraday high of S$4.71 on above-average volume. By late morning, shares had climbed further, gaining 5.2% or S$0.24 to S$4.88, marking their highest level in over two months, a position last seen on November 19, according to Business Times reports. This movement underscores investor optimism regarding Singtel’s strategic shift towards high-power, AI-ready data centre infrastructure, moving beyond its traditional telecommunications core.
Singtel’s Strategic Pivot into Data Centres
The proposed acquisition of a stake in STT GDC is seen as a pivotal move for Singtel, aiming to deepen its presence in the rapidly expanding data centre sector. Analysts suggest this could be one of Asia’s largest data centre transactions, with the potential to transform Singtel into a global data centre powerhouse. The deal would support enterprise 5G, cloud, and edge services, areas experiencing firm demand across Singapore and the broader region.
STT GDC, established in 2014 by ST Telemedia (wholly owned by state investor Temasek), boasts an IT load capacity exceeding 2.3 gigawatts globally, with 110 megawatts across six facilities in Singapore. This capacity is considerably larger than Singtel’s current data centre holdings, offering significant scale. The consortium structure, which includes KKR and potential minority co-investors like sovereign wealth funds GIC and Mubadala Investment, aims to distribute the substantial capital load while accelerating capacity expansion.
The STT GDC Deal: Valuation and Potential
While Singtel has confirmed advanced talks, it has also cautioned that no binding agreement has been reached, meaning the deal is not guaranteed to proceed. Should it materialize, the acquisition could enable a potential merger between Singtel’s data centre brand, Nxera, and STT GDC in the long term, creating a formidable global player. This consolidation could leverage STT GDC’s extensive scale with Singtel’s growing expertise in AI data centres.
DBS analysts noted in November 2025 that STT GDC’s capacity is ‘much larger’ than Singtel’s, highlighting Singtel’s competitive edge in AI data centres. An investment could also unlock growth opportunities in new markets where Singtel currently lacks a data centre presence, such as the UK, Germany, India, and other parts of Asia, as previously pointed out by DBS in June 2024. KKR, a significant investor in data centre infrastructure, had previously invested S$1.1 billion for a 20% stake in Singtel’s Nxera in 2023, signaling a long-standing strategic alignment.
Investor Outlook and Singtel Share Price Drivers
The market’s positive reaction reflects the perceived ‘optionality’ the STT GDC deal offers, potentially adding a new growth leg beyond Singtel’s traditional core telco business, which often trades at lower valuation multiples. Investors are closely monitoring any official updates on the consortium deal, including details on stake size, governance rights, and the funding mix, which will likely influence the Singtel share price in the coming quarter.
On February 3, the Singtel share price closed at S$4.64, with a range between S$4.61 and S$4.71. Trading volume of 23.5 million shares exceeded the 21.0 million average, indicating strong market interest. Technical indicators showed the 50-day average near S$4.58 as initial support, with immediate resistance at S$4.71, aligning with the Keltner upper channel. A sustained close above S$4.71 could pave the way for a run towards the 52-week high of S$4.92, according to Meyka.
Fundamentally, Singtel trades at 12.5x trailing twelve-month earnings and 2.83x book value, with a dividend yield near 3.92%. Its balance sheet appears robust, with a debt-to-equity ratio of 0.42 and net debt to EBITDA of 1.34, suggesting sufficient capacity for co-investment without undue strain. The company’s next earnings announcement on May 20, 2026, is also a key event for further clarity on capital plans and data centre strategy.
Analyst Views on Singtel’s Data Centre Future
Market watchers and analysts are largely optimistic about the deal’s potential to strengthen Singtel’s data centre business. RHB highlighted the transformative potential of the acquisition, suggesting it could turn Singtel into a powerhouse in the sector. The combination of STT GDC’s immense scale and Singtel’s AI data centre expertise is a compelling prospect for future growth.
However, risks remain, including potential valuation pressure, complexities in integrating operations, and the substantial capital expenditure requirements for developing advanced AI-ready data centres. Without a binding agreement, timelines could shift, and the ultimate success will depend on prudent deal structuring, effective execution, and the realization of commercial synergies, particularly in cross-selling managed network, security, and cloud services.
The strategic rationale behind Singtel’s pursuit of a stake in STT GDC appears clear: to diversify revenue streams and capitalize on the booming demand for digital infrastructure, especially AI-driven data centres. While the immediate share price reaction reflects investor enthusiasm for this growth optionality, the long-term re-rating of Singtel will hinge on the successful closure of the deal and the company’s ability to integrate and extract value from this significant investment, transforming it from a traditional telco into a formidable digital infrastructure player.