French major Schneider, Temasek snap up L&Ts electrical, automation biz for Rs 14,000 cr (Eds: Adding more details and comments from Temasek)
Mumbai, May 1 (PTI) French energy management and automation solutions giant Schneider Electric and Singaporean sovereign wealth fund Temasek Holdings today snapped up engineering major Larsen & Toubros electrical and automation (E&A) business for Rs 14,000 crore in an all-cash deal.
While Schneider will own 65 per cent, Temasek will control 35 per cent shareholding in Schneider Electric India, the Singaporean investor said in statement. The French major entered the country in 1995.
Earlier in the day, L&T said it has decided to divest its E&A business, which had net revenue of Rs 3,590 crorein the first nine months of FY18 and Rs 5,038 crore in FY17, as part of its broader strategy of unlocking value from its existing verticals and better allocate capital.
Accordingly, it has agreed to sell the E&A business to Schneider Electric for a consideration of Rs 14,000 crore, subject to regulatory approval, which is expected to be in over the next 18 months.
The transaction includes L&Ts electric and automation unit except the marine switch gear and servowatch systems.
"The divestment of E&A business is in line with our stated intent of unlocking value within the existing business portfolio to streamline and allocate capital and the management focus for creating long-term value for stakeholders," L&T chief executive and managing director SN Subrahmanyan said in a statement.
The Rueil-Malmaison, France-headquartered Schneider Electric SE is a 180-year-old multinational corporation that specialises in energy management, automation solutions, spanning hardware, software, and services.
The partnership with Schneider is a win-win for the employees, business partners, and the shareholders, Subrahmanyan added.
The transaction covers all segments of E&A business except marine switchgear and servowatch systems, he said.
The E&A business offers a wide range of low and medium voltage switchgear, electrical systems, marine switchgear, industrial and building automation solutions, energy management systems and metering solutions.
The E&A business has manufacturing facilities at Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysore as well as in Saudi Arabia, UAE (Jebel Ali, Dubai), Kuwait, Malaysia, Indonesia, and Britain.
"This vertical has had a strong presence for decades and is well-positioned to continue its growth trajectory with outstanding technologies, brands, people and global presence.
"We believe the partnership with Schneider, which has a strong product and geographic presence, would further enhance the business prospects for E&A business and its employees," L&T group chairman AM Naik said.
Commenting on the transaction, Rohit Sipahimalani, joint head at Temasek India, said "our investment in Schneider Electric India is another step in the steady growth of our portfolio in India over the past few years, and reflects the type of partnership opportunities that we seek to invest into.
"Indias favourable demographics, as well as its growing middle income population and consumption trends, represent opportunities for us to further invest in growing Indian companies"and look forward to more such investment opportunities."
It can be noted that the USD 17 billion L&T, which is the largest engineering conglomerate in the country has been pruning business lines as it seeks to streamline its focus on core verticals.
The transaction was advised by Bank of America and Citigroup.
The L&T counter closed 1.73 per cent at Rs 1,400.60 on the BSE yesterday on a day when the benchmark Sensex rallied 0.55 per cent. The markets were closed due to the May Day holiday today. PTI BEN DS BEN BEN