Global Switch owns and operates carrier and cloud, neutral
data centres across Europe and Asia-Pacific. The company claims
that the money raised by the deal will be used to expand its
operations, in particular by accessing the fast-growing
telecommunications and internet provider customers to support
their growth outside of China.
The consortium, comprised of high quality, private sector
Chinese corporate and institutional investors, has made a
strategic investment into Global Switch to give it common
control of the Company alongside the existing sole shareholder,
Aldersgate Investments Limited, a Reuben Brothers company. The
consortium is paying cash consideration of £2.4 billion
for the 49% stake.
Aldersgate Investments Limited, the shareholder company,
owned by the Reuben brothers, will now jointly control the
Global Switch with Elegant Jubilee.
The Elegant Jubilee consortium was formed by Li Qiang, who
is a major shareholder in Chinese data centre company
Daily-Tech Beijing whose biggest investor is the Jiangsu Sha
Steel Group, the largest private steelmaker in China.
Mr Li Qiang said: "We are tremendously excited to be
investing in Global Switch, which has grown to become one of
the world’s leading data centre companies. We
believe that bringing together the high-quality data centres
and operational excellence of Global Switch with the rapidly
growing demand from Chinese customers creates a perfect match
that will deliver significant future growth opportunities. On
behalf of the investing consortium, we are delighted to be
partnering with the Reuben Brothers and the Global Switch
management team to grow the business strategically and to take
it to the next stage of its development."
John Corcoran, Chief Executive Officer of Global Switch,
said: "This investment will continue to open up opportunities
for Global Switch to become the data centre provider of choice
for new customers from across the globe, and especially Chinese
companies growing in Asia and Europe and Western companies
growing in China."
Global Switch will build a new data centre in Shanghai in a
joint venture with Daily-Tech, a well-worn route for Western
companies to gain access to the Chinese market and one which
could soon become even more difficult as cyber security laws
Global Switch also announced major deals in Hong Kong and
Singapore, illustrating the benefits of the transaction and the
scope for future growth. For these pre-commitments, China
Telecom Global will, upon construction completion, become the
end customer in Hong Kong and Singapore through direct service
agreements with Daily-Tech. These pre-commitments are among the
largest customer commitments made in the global data centre
industry and will provide further asset and revenue
diversification for Global Switch.
Donald Tan, Executive Vice President Network Operations at
China Telecom Global, said: "Global Switch’s new
state of the art data centres in Hong Kong’s
Tseung Kwan O and Singapore’s Woodlands will
provide the secure, resilient, centrally located facilities
that we require to provide services to our customers, which
include international carriers and multinational corporates. We
look forward to working with Global Switch and to the
significant long-term benefits this partnership will deliver
for our business and customers."
Based on the first of these pre-commitments, Global Switch
has already begun construction of its new 100 MVA world-class
data centre in Hong Kong, located on the Tseung Kwan O (TKO)
Science and Technology Park. The data centre is close to the
Hong Kong Stock Exchange and HSBC data centres, as well as the
TKO submarine cable landing station, and provides low latency
connectivity to all major business districts in Hong Kong.
Daily-Tech’s pre-commitment covers data centre
services, including managed and cloud enabling services, to be
provided from the first stage of the new TKO data centre,
comprising two of the five buildings to be constructed.
Completion of the first stage is planned for mid-2017 with
further stages coming onto the market progressively. Once all
stages are complete, the data centre will become the largest
carrier-neutral data centre in Hong Kong.
The £2.4bn deal for the Reuben Brothers business was
criticised by UK politicians earlier this year when they spoke
of nervousness over Chinese corporations having control over
the UK’s digital infrastructure.
Ahead of the sale, the former UK foreign secretary and
former head of Parliament’s intelligence and
security committee, Sir Malcolm Rifkind, and Labour peer Lord
West of Spithead raised concerns over Chinese access to the
Global Switch has downplayed the matter, saying that the
investors will not have access to the data centres. The company
said that it was more like a real estate business and that it
would continue to comply with the UK Centre for the Protection
of National Infrastructure, The Financial