Jiangsu Shagang Group of China is putting the London-based operator Global Switch on the market, valued at around $11 billion (£8 billion), according to Bloomberg.

Shagang took control of Global Switch in progressive acquisitions from 2016 to 2019, and then failed to launch it on the Hong Kong stock market. The operator has 13 data centers across Europe and APAC, with nearly 400,000 sq m of white space. Bloomberg says the discussions are "preliminary" and the owner may decide to keep the operator.

Global Switch
– Global Switch

Switch of tactics

Global Switch was founded in 1998, and has been led by CEO John Corcoran since 2014. The original owners, billionaires David and Simon Reuben, sold nearly half the company in 2016 to a Shagang-led consortium called Elegant Jubilee, which took a majority share in 2018. Shagang itself bought 24 percent more in 2019. In November 2020, the company was transferred to Shagan's Shenzhen-based unit, Jiangsu Shagang.

Bloomberg heard of the potential sale from "anonymous sources," and sees it as another example of Chinese firms selling recently acquired assets. In recent months, HNA Group has sold tech distributor Ingram Micro, for instance.

Some Chinese-owned businesses have been losing customers due to security concerns. In Australia, for instance, all government agencies were required to move out of Global Switch's Sydney campus by September 2020. That data center also suffered a problem with its fire-suppression system in November 2020, which took at least one customer offline.

If Shagang does sell, there's a strong market. During 2020, increased reliance on online services led to a continuation of the current boom in data center building, along with record-breaking acquisition activity. In December, Synergy Research Group reported that 2020 had seen nearly $31 billion of mergers and acquisitions in the data center field - more than double the total for 2019.

The largest single deal was Digital Realty’s acquisition of Interxion for $8.4 billion - a deal struck in 2019 which closed in the first quarter of 2020.

Global Switch and Shagang have not commented on Bloomberg's story.