(Alliance News) - KDDI Corp on Wednesday said that it has signed a deal with Allied Properties REIT to buy its data centre business, as it progresses plans to establish a new subsidiary in Canada.

The Tokyo-based telecommunications company will buy Allied's business for CAD1.35 billion, or GBP804.1 million. Allied Properties is an Ontario-based owner and developer of urban office space for business tenants operating in Canada.

KDDI is currently in the process of establishing a subsidiary in Canada, in order to expand its global data centre business. KDDI Canada Inc will be based in Toronto, and will have starting capital of CAD1.10 billion, or GBP655.0 million.

KDDI said that current officers and employees of the firm will be appointed as members of the new subsidiary's board of directors and as its chief executive officer.

It expects a "minor impact" on annual results for financial 2024, but said the subsidiary would contribute to improving earnings over the medium to long term.

"As the global data business accelerates and the need for data centers increases, connectivity data centers, where Internet operators and hyperscalers are interconnected, are becoming increasingly important for realizing a digital society," KDDI said.

KDDI shares closed 0.6% higher at JPY4,403.00 in Tokyo on Wednesday.

By Holly Beveridge, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.