Keppel dives deeper into subsea cable business with Global Marine Group acquisition

　　Singapore-based Keppel, a global asset manager, announced on Monday that its flagship infrastructure fund has acquired a 100% stake in Global Marine Group (GMG), which provides maintenance, emergency repair and installation services for fiber optic cables worldwide.

　　The company said the deal is the first investment of its Keppel Infrastructure Fund (KIF), formerly known as Keppel Asia Infrastructure Fund II (KAIF II).

　　GMG, based in the UK, has been sold by investment affiliates of J.F. Lehman & Company to KIF and its co-investor for an undisclosed amount.

　　The company is one of the world's largest independent providers of subsea cable solutions with a fleet of six vessels and a strong track record of contract renewals with telcos, hyperscalers and global equipment suppliers.

　　"It is a rare and unique opportunity to acquire a world-leading provider of subsea cable maintenance and installation service," christina Tan, CEO of fund management and chief investment officer of Keppel, said in a statement. "With a substantial proportion of GMG's business secured by long-term contracts with huge growth potential, especially in Asia, we are poised to deliver attractive risk-adjusted returns to our investors."

　　According to Keppel, market leader GMG is well positioned to maintain a high fleet utilization of close to 100%, which will support sustainable growth in the long term. Citing its KAIF II commercial due diligence report, Keppel said the maintenance and installation services market will grow at a CAGR of approximately 45% from 2023 to 2029.

　　Great opportunities in subsea cable business

　　Keppel sees immense growth potential in the submarine cable business in the coming years and has announced plans to deepen its business as part of its digital infrastructure strategy, including forays into data centers.

　　Last month, during its financial results for the year ending December 31, 2024, the company said it plans to pursue two new submarine cable systems with 30 fiber pairs connecting Singapore to the rest of Asia and beyond.

　　The company is also prepared to launch, in the second half of 2025, the Bifrost Cable System: its first major venture into the subsea cable market as part of a consortium that includes Meta and Indonesia's Telin. The more than 20,000km submarine cable system will directly connect Singapore to the West Coast of North America and is the first subsea cable system between Southeast Asia and the US to be approved in the last eight years.

　　"When completed, Bifrost will not only deliver enhanced connectivity and network diversity to our customers but also generate attractive returns for Keppel and our private fund co-investors, with expected internal rate of return of over 30% per annum," said Keppel CEO Loh Chin Hua during last month's earnings call, as quoted by The Straits Times.

　　In December, Keppel was reportedly in talks with Vietnamese conglomerate Sovico Group to build submarine cable systems that would connect Vietnam to Singapore and other countries in Asia. One plan, favored by Sovico Group, involves a cable that would connect Vietnam directly to Singapore at a cost of $150 million. Keppel is said to be leaning toward another plan that would see the Vietnam link as an offshoot of a longer cable that would run from Singapore to Japan, with connections to other countries along the route.

　　Meanwhile, Keppel signed a multi-year strategic framework agreement with AWS in December 2024 to collaborate on data centers, subsea cables and renewable energy. Among other things, the companies plan to develop subsea cable systems to support AWS's global network and work to expand sustainable data center infrastructure around the world.