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Exclusive: Brookfield enters $11bn race to buy Global Switch

Global Switch owns and operates 13 data centres in Europe and Asia Pacific spanning about 428,000 sqm/4.6 million sq ft.

By João Marques Lima

Founder and Editor, The Tech Capital

4 Mins

November 29, 2021 | 12:01 AM GMT

Brookfield Asset Management (NYSE: BAM) is among suitors bidding to acquire operator Global Switch which could deliver this year’s fourth US$10 billion-plus data centre acquisition, according to sources speaking to The Tech Capital.

The alternative asset management firm joins a group of companies also weighing bids for the London-based operator including Blackstone Inc. (NYSE: BX), KKR & Co. (NYSE: KKR), DigitalBridge (NYSE: DBRG), Equinix (NASDAQ: EQIX), and Digital Realty (NYSE: DLR).

A Global Switch spokesperson told The Tech Capital: “Global Switch’s shareholders have informed the company that they continue to evaluate their options to potentially introduce international strategic investors to the company and create liquidity for their stakes at the same time.

“This evaluation is progressing but no formal transaction process has yet commenced. Any further announcements will be made in due course, as and when appropriate.”

Brookfield representatives were not available for comment.

Global Switch is controlled by Chinese steelmaker Jiangsu Shagang Group Co. (SHE: 002075) and backed by Avic Trust Co. The company has been mulling a sale that could reach a price tag of £8 billion (US$10.7 billion) or more.

Global Switch owns and operates 13 data centres in Europe and Asia Pacific spanning about 428,000 sqm/4.6 million sq ft.

Brookfield digital infrastructure investments

Brookfield interest in data centres and the wider digital infrastructure sector has seen the company and its subsidiary Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN) heavily invest in the sector throughout 2021, especially across Asia Pacific.

One of its flagship deals for the year has been the creation of a 50/50 joint venture focused on the development, ownership and operation of institutional data centres in India alongside Digital Realty.

The joint venture operates under the brand name BAM Digital Realty with analysts forecasting an investment over the next 10 years to reach between $5 and over $10 billion, with at least $2 billion committed for market entry.

Brookfield Infrastructure has also recently purchased a 30-acre piece of land in Navi Mumbai, India, to build an institutional data centre. The roughly 1.3 million square foot parcel in Airoli was sold by K Raheja Corp for a cash consideration of around Rs 550 crore ($76.45 million).

In Europe, Brookfield and Alecta acquired a 49% stake in Swedish multinational Telia Company in July. The two parties paid €722 million ($857 million) for the share portion.

Brookfield’s portfolio company DCI Data Centers (DCI) has also been heavily investing in expanding its Australian footprint.

Brookfield Infrastructure’s global data infrastructure portfolio, which currently includes $23 billion in assets across data transmission, distribution, and storage, including a portfolio of 139,000 operational telecom wireless towers in India, which it intends to expand to 175,000 over the near term.

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João Marques Lima

Founder and Editor, The Tech Capital

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