The Boards of Directors of Mindtree Ltd. and L&T Infotech Ltd (LTI) at their respective meetings on Friday approved a composite scheme of amalgamation of both the independent listed IT services companies of the Larsen & Toubro Group.
The name of the combined entity will be LTIMindtree Ltd.
Upon the scheme becoming effective, all shareholders of Mindtree will be issued shares of LTI at the ratio of 73 shares of LTI for every 100 shares of Mindtree.
Larsen & Toubro Ltd. will hold 68.73% in the merged entity. The integration will result in an IT services provider with combined annual revenue of $3.5 billion, and an employee strength of 80,000, the companies said in a joint statement.
The new shares of LTI so issued will be traded on the NSE and BSE. Larsen & Toubro Ltd. will hold 68.73% of LTI after the merger.
The proposed integration will see Mindtree and LTI create an IT services provider with combined revenue of $3.5 billion, Mindtree chairman A.M. Naik said.
For now, the companies will continue to function independently. A Steering Committee will be constituted to oversee the transition till the merger process is complete.
Sanjay Jalona, CEO and MD, LTI has decided to move on from the company and the combined entity will be led by Mindtree CEO & MD Dabashis Chatterjee.
The combined entity will have an employee strength of 80,000 people. The transaction is subject to shareholder and regulatory approvals and is expected to close within a year.
“Given that recent industry shifts (e.g., prominence of large deals, preference for end-to-end offerings) are benefitting at-scale players, the two companies have decided that the time is appropriate to combine the strengths of both organizations to better serve the customers,” the companies said in a joint statement.
“The merger is expected to result in improvement in large deal capabilities. These opportunities will create a more distinctive employee value proposition and stronger partnerships with ecosystem players,” they added in the statement.
Mr. Naik added: “This merger represents our continued commitment to grow the IT services business in line with our strategic vision. The highly complementary businesses of Mindtree and LTI will make this integration a ‘win-win’ proposition for our customers, investors, shareholders, and employees.”
S. N. Subrahmanyan, Vice Chairman, Mindtree, said, “We are confident that the proposed merger will help us build on the combined strengths of both these organizations to unlock synergies through scale, cross-vertical expertise, and talent pool.”
“This will help us emerge as a partner of choice for large-scale tech transformations and create a distinctive employee value proposition,” he added.
