Equinix has announced the sale of eight data centres across Europe to Digital Realty Trust for approximately $874 million, reports Telecoms.com.
The deal forms part of a trade-off with competition authorities, as part of the agreement to acquire Telecity which was completed in January. For the acquisition to be accepted by the European Commission, eight data centres had to be relinquished by Equinix, which have now been confirmed as:
Recently acquired Telecity assets:
- Bonnington House (London)
- Sovereign House (London)
- Meridian Gate (London)
- Oliver’s Yard (London)
- Science Park (Amsterdam)
- Amstel Business Park I (Amsterdam)
- Lyonerstrasse (Frankfurt)
Existing Equinix assets:
- West Drayton data centre in London
The $3.8 billion acquisition of Telecity added 34 data centres to the Equinix portfolio, and more than doubled the company’s footprint in Europe. Equinix claims it is now the largest retail colocation provider in Europe and globally. Through the deal, Equinix opened up new markets in Dublin, Helsinki, Istanbul, Manchester, Sofia, Stockholm, and Warsaw, now totalling 145 IBX data centre facilities in 40 markets worldwide.
“Equinix’s acquisition of TelecityGroup added critical network and cloud density to better serve our global customers,” said Steve Smith, CEO at Equinix. “Completing this last milestone in the acquisition process paves the way for us to focus fully on helping our enterprise customers leverage our highly interconnected, global data centers for accelerated business performance and innovation.
“Additionally, the purchase of the Paris facilities is an important step in managing our real estate portfolio and ensuring we have the ability to add more capacity in this key market in the future.”
The European Commission has approved the proposed acquisition of data centre operator Telecity by rival Equinix. However, to assuage anti competition concerns, Equinix had to agree to sell off a number of data centres in Amsterdam, London and Frankfurt.
BCN reported in May that Equinix and TelecityGroup agreed to the $2.35bn takeover in which US-based Equinx would buy all issued Telecity shares. The acquisition gives Equinix a stronger presence in the UK and would extend its footprint into new locations with identified cloud and interconnection needs including Dublin, Helsinki, Istanbul, Milan, Stockholm and Warsaw. Equinix provides colocation services in 33 metropolitan areas worldwide. Telecity operates data centres in 12 metropolitan areas in the European Economic Area (EEA) and Turkey.
However, the activities of Equinix and Telecity overlap in the four EEA metro areas of Amsterdam, Frankfurt, London and Paris.
In a statement issued by the EC Commissioner in charge of competition policy Margrethe Vestager said the growing economic importance of cloud services makes it crucial to maintain competition between data centres. However the deal does not necessarily stifle competition, Vestager said. “The Commission is satisfied that the commitments offered by Equinix will ensure that companies continue to have a choice for hosting their data at competitive prices,” said Vestager.
The Commission has concerns that the concentration of data centres controlled by one vendor could lead to higher prices of colocation services in the Amsterdam, London and Frankfurt metropolitan areas. The remaining competitors in these areas are unlikely to be able to match the competitive pressure currently exercised by Telecity, it had concluded, and new players would have faced significant difficulties to enter the market due to the high investment and deployment times needed.
To address the Commission’s concerns, Equinix submitted commitments, offering to divest a number of data centres in Amsterdam, London and Frankfurt.