Digital Realty will buy fellow data center operator Interxion for about $8.4 billion. The deal expands San Francisco-based Digital Realty’s European footprint and better positions it to compete against colocation market leader Equinix.

Also today, Digital Realty announced an edge computing partnership with Vapor IO.

Digital Realty says the Interxion acquisition will help it meet growing global demand from cloud and service providers as well as enterprises seeking colocation, hybrid cloud, and hyperscale data center services.

The purchase “builds upon Digital Realty’s established foundation of serving market demand for colocation, scale, and hyperscale requirements in the Americas, EMEA, and Asia Pacific and leverages Interxion’s European colocation and interconnection expertise,” said Digital Realty CEO A. William Stein in a statement.

Interxion owns 53 facilities in 11 European countries and 13 metro areas including Frankfurt, Amsterdam, Paris, and Interxion’s Internet Gateway in Marseille, France. Digital Realty, meanwhile, has data centers in London and Dublin. The combination will provide data center services with low-latency access to about 70% of the GDP in Europe, the companies say.

Under the deal, Interxion shareholders will receive 0.7067 Digital Realty shares per Interxion share. This values Interxion at about $93.48 per ordinary share.

Stein will serve as CEO of the combined company and Interxion CEO David Ruberg will serve as the chief executive of the company’s Europe, Middle East, and Africa (EMEA) business, which will be branded “Interxion, a Digital Realty company.”

Hot Colocation Market

The acquisition will also boost Digital Realty’s prowess in the colocation market, which Equinix currently dominates. According to Synergy Research’s latest numbers, during the first quarter of 2019 Equinix was the retail colocation market leader by revenue in 14 of the top 20 metros. Digital Realty, meanwhile, led in eight of the top 20 wholesale markets.

Equinix, however, has continued to expand its global footprint. Earlier this month, it paid $175 million for three data centers in Mexico.