Britain’s richest family, brothers David and Simon Reuben, are in advanced talks to sell half of their one of the world’s biggest computer hosting networks Global Switch to a Chinese consortium led by Daily Tech. The potential deal value Global Switch at about £5.2 billion, including debt.
The Sunday Times was first to report that under the terms being discussed, the Chinese could take a 50 percent shares in Global Switch with the possibility of buying the other 50 percent at a later date.
Global Switch and its parent company, Aldersgate Investments Limited, has confirmed in a statement on Sunday the press speculation relating to the potential strategic investment in Global Switch.
Daily Tech, a data centre giant run by its founder Li Qiang, hosts server space for the likes of Alibaba. The consortium of dozen other Asian investors, is including Avic Trust, a private financial subsidiary of the state-owned Aviation Industry Corporation of China.
The U.K.-based Global Switch operates ten data centres in key connectivity hubs across Europe and Asia-Pacific, according the company. Its two centers in London are the biggest in Europe. The company manage servers for a range of Wall Street banks and Sprint, the US wireless internet provider.
The potential investment, the company said, will allow Global Switch to continue to unlock access to the fast growing telecommunications and internet markets in Asia. Both partners will exercise joint control of Global Switch. While discussions are ongoing, no transaction has yet been concluded.
There will be no change to the management or strategic direction of Global Switch.
The talks have raised some security concerns over the sale of the data centres headquartered in the UK to the Chinese, leading to calls for UK security services to vet the deal. Labour peer Admiral Lord West, a former security minister, said the prospect of the deal alarmed him.
“I have a nervousness about the Chinese getting more and more involved in large chunks of our digital infrastructure, ” he said.
The company said: “Global Switch provide highly resilient and secure data centre space which complies with the guidance issued by the UK Centre for the Protection of National Infrastructure as part of the UK Government’s national security strategy.”
According to Sunday Times, spokesperson for Global Switch said the new Chinese investors will have no role in its management or day-to-day running and will have no access to any customers’ data.
The Reuben brothers topped the Sunday Times Rich List for the first time this year with estimated wealth of £13.1 billion ($18.9 billion), slot from last year’s fifth position.
The Reubens were born in India to a wealthy Iraqi-Jewish family before moving to Britain in the 1950’s and made their fortune in metals and property.
The brothers made their first fortunes trading aluminium in London, New York and Russia, but later built up their property interests; they also own stakes in Metro Bank.