Dutch colocation giant Interxion has sold up to US player Digital Realty in a deal worth an eye watering $8.4bn.
Interxion, which logged revenues of €561.8m in 2018, has been ramping up its presence in Europe over the last few years. It has 53 datacentre facilities across 11 European countries, including in cities such as Frankfurt, Amsterdam and Paris. Last year it announced plans to open a new site in London as it cut the ribbon on a new facility in Marseille.
Digital Realty meanwhile claims to operate more than 210 datacentres globally across 14 countries in five continents. The Dutch firm substantially adds to Digital Realty's European footprint, which just consists of facilities in Dublin and London.
The deal will make Digital Realty Europe's second largest datacentre provider behind Equinix, with combined revenues expected to reach $1.1bn.
The transaction, which is set to close at some point in 2020, will see Digital Realty acquire 100 per cent of Interxion, valuing it at $94.48 a share, or $8.4bn.
If completed, it will dwarf any acquisition made by close competitor Equinix. Equinix closed its blockbuster deal for Telecity in 2015 for $3.8bn which made it Europe's number one provider.
The deal scuppered M&A talks for a $2.2bn deal between Telecity and Interxion at the time.
Equinix's then went on to buy up 29 datacentres from Verizon in 2017 in a deal worth $3.6bn.
Once the deal has completed, Interxion will be rebranded as "Interxion, a Digital Realty company". Interxion's CEO David Ruberg will lead the new brand under the title CEO of EMEA for around one year from the transaction's completion, after which he will transition out of the role.
Digital Realty's CEO William Stein will serve as CEO of the combined business.
"This strategic and complementary transaction builds upon Digital Realty's established foundation of serving market demand for colocation, scale and hyperscale requirements in the Americas, EMEA and Asia Pacific. It leverages Interxion's European colocation and interconnection expertise, enhancing the combined company's capabilities to enable customers to solve for the full spectrum of datacentre requirements across a global platform," said Digital Realty CEO Stein.
"The transaction is expected to be accretive to the long-term growth trajectory of the combined organisation, and to establish a global platform that we believe will significantly enhance our ability to create long-term value for customers, shareholders and employees of both companies."
Digital Realty claims that it will plough ahead with Interxion's planned pipeline of datacentre development projects. It claims Interxion has invested more than $400m to date, with another $600m of investments in the works to be completed over the next two years.
The US firm claims merging with Interxion will create added scale, a more efficient cost structure and "industry-leading" EBITDA margins.
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