Consortium (including PLA Contractor, AVIC) in Advanced Talks to Purchase Stake in British Data Center Giant

It was announced on Sunday, September 4, that the parent entity of the British-owned ‘‘‘Global Switch,‘ a firm that develops and operates data centers in Europe and Asia for government, financial and array of other clients, was in discussions to sell a 50% stake in their company to an Asian consortium (called Daily Tech) that includes a subsidiary of prominent PLA contractor, Aviation Industry Corporation of China (AVIC).

The AVIC subsidiary, described as a private financial firm, is known as AVIC Trust.  The parent entity being acquired is Aldersgate Investments Limited.  The talks are reportedly at an advanced stage, with the deal valued at some ‘5 billion pounds.

Outside experts and observers have urged scrutiny of this transaction, due to the potential security risks associated with foreign buyers taking control of properties that house privileged, sensitive data and function as critical infrastructure.  The presence of AVIC in the consortium should be a leading motivator of such a review, as it is a principal foreign procurement arm of the Chinese military and one that is overtly one of their preeminent defense contractors.

Aldersgate has defended the sale on the basis that the consortium‘s stake will not give it access to, or influence over, actual data being housed within the company‘s facilities, noting that it would have ‘‘‘no change to the management or strategic direction of Global Switch‘‘_This is a potential financial investment into a real estate company.  The investors will have no involvement in the operations or management of the company.”