Japan's NTT Communications buys German data centre operator e-shelter

(Adds deal value, source)

TOKYO/FRANKFURT, March 3 (Reuters) - Japan's NTT Communications Corp said on Tuesday it has agreed to buy German data centre firm e-shelter, becoming Europe's third-biggest operator in the sector from the latest in a series of overseas acquisitions to counter sluggish domestic growth.

NTT Communications, an unlisted division of Japanese telecoms company Nippon Telegraph and Telephone Corp (NTT) did not disclose financial terms but a person familiar with the deal said that it values e-shelter at slightly more than $1 billion including debt.

The equity part of the transaction is roughly 100 billion yen ($832 million), the source said. That is broadly in line with another source's previous estimate on the proposed deal's value.

In a joint statement, NTT Communications and e-shelter said the Japanese business will acquire 86.7 percent of the German company founded in 2000. Operating data centres in four major cities in Germany including Berlin, as well as in Zurich and Vienna, e-shelter is Germany's biggest provider of data centre services, they said.

NTT plans to use e-shelter as a hub for further growth. "Most of that will be organic growth, as there are only few independent data centres available, which compete with telecoms incumbents such as Deutsche Telekom (LSE: 0MPH.L - news) and Vodafone ," the person familiar with the deal said.

The European deal stretches the NTT brand further across the globe. In 2010 parent NTT bought South Africa's Dimension Data for 382 billion yen, followed in 2013 by NTT Communications signing deals with a combined value of 85.5 billion yen to take over two U.S. cloud computing businesses, Virtela Technology Services and RagingWire Data Centers.

Parent NTT's shares were down 0.7 percent at the close in Tokyo, against a flat benchmark Nikkei 225 index.

Lazard advised NTT on the deal, while e-shelter was advised by Morgan Stanley (Xetra: 885836 - news) . ($1 = 120.1400 yen) (Reporting by Chris Gallagher and Teppei Kasai in Tokyo and Arno Schuetze in Frankfurt; Editing by Edwina Gibbs, Kenneth Maxwell and David Goodman)