Construction conglomerate Larsen & Toubro (L&T) has decided to sell its electrical and automation business.
It has inked a definitive agreement with Schneider Electric, a global player in energy management and automation, for strategic divestment of its electrical and automation (E&A) business. It is an all-cash consideration worth ₹14,000 crore.
L&T’s E&A business offers a wide range of low and medium voltage switch-gear, electrical systems, marine switch-gear, industrial and building automation solutions, energy management systems and metering solutions. Its manufacturing facilities are located at Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysore in India as well as in Saudi Arabia, the UAE (Jebel Ali, Dubai), Kuwait, Malaysia, Indonesia, and the U.K.
Over the years, the E&A business has built strong research and development capabilities and has a wide network of channel partners across India and international markets. The E&A business reported net revenue of ₹5,038 crore during FY2016-17.
The deal is subject to assorted regulatory approvals, the company said in a filing with the BSE.
“L&T’s E&A business 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 Electric, which has a strong product and geographic presence, will further enhance the business prospects for E&A business & its employees,” a release quoted A.M. Naik, Group Chairman, Larsen & Toubro, as saying.
Mr S.N. Subrahmanyan, CEO & MD, Larsen & Toubro said in the release: “The divestment of E&A business is in line with L&T’s stated intent of unlocking value within the existing business portfolio to streamline and allocate capital and management focus for creating long-term value for our stakeholders. We believe the partnership with Schneider is win-win for our employees, business partners, and shareholders.”
The transaction includes all the current business segments of E&A except marine switch-gear and Servowatch systems.
