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L&T gets Competition Commission approval to acquire 66.15% stake in Mindtree

CCI has approved acquisition of up to 66.15 per cent of the total equity shareholding of Mindtree Limited, on a fully diluted basis, by Larsen and Toubro Limited

twitter-logo BusinessToday.In        Last Updated: April 6, 2019  | 15:40 IST
L&T gets Competition Commission approval to acquire 66.15% stake in Mindtree
With this, L&T has crossed the first regulatory hurdle in acquiring majority stake in Mindtree.

Larsen and Toubro (L&T) has secured the approval of Competition Commission of India (CCI) to acquire controlling stake in Mindtree. Reports suggest that the competition watchdog has allowed L&T to acquire up to 66.15 per cent stake in the Bengaluru-based IT services firm. With this, the engineering and construction major has cleared the first step in its hostile takeover of Mindtree.

"CCI approves acquisition of up to 66.15 per cent of the total equity shareholding of Mindtree Limited, on a fully diluted basis, by Larsen and Toubro Limited," the authority posted on its Twitter handle.

Stake acquisition deals beyond a certain limit need CCI's approval to go through. Failing to acquire this approval could lead to the entire deal coming undone. However, this is one of the first regulatory approvals L&T would need to secure. The company will have to approach anti-trust authorities in Germany and the US as Mindtree operates in these markets too, a report by the Business Standard said.

ALSO READ:Will L&T splurge more to woo Mindtree promoters?

ALSO READ:Mindtree board evaluating 'several options' to stave off L&T bid, says Natarajan

In the mid of March, L&T bought 20.40 per cent stake in Mindtree from Cafe Coffee Day founder VG Siddhartha for about Rs 3,300 crore. The company said it would raise its stake in Mindtree to 66.32 per cent by spending as much as Rs 7,464 crore through a combination of open offer and stock market purchase, taking the total deal value to Rs 10,800 crore. Following up on its plan, L&T made an open offer to acquire 31 per cent stake in the IT services firm for Rs 5,030 crore in the last week of March.

Meanwhile, Mindtree has set up a committee of independent directors to evaluate L&T's open offer. While all the independent directors of the company will be members, the committee will be headed by the lead independent director Apurva Purohit. The committee will be take in consideration all aspects of the 'unsolicited offer', by looking into all the relevant facts, circumstances, data related and provide an informed view, keeping in mind the interest of all stakeholders in the company. Earlier this month, the independent directors' panel of Mindtree roped in Khaitan and Co, and ICICI Securities as independent advisors.

ALSO READ:L&T Chairman AM Naik denies hostile takeover of Mindtree; says open to negotiations

ALSO READ:Mindtree panel ropes in Khaitan and Co, ICICI Securities as advisors

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