Larsen & Toubro, an Indian multinational conglomerate, has signed, subject to regulatory approvals, definitive agreements with Schneider Electric, a global player in energy management and automation, for strategic divestment of its Electrical and Automation (E&A) business for an all-cash consideration of ₹14,000 crore ($2.096 billion). 

 

L&T’s 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. 

 

Its manufacturing facilities are located at Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysore in India as well as in Saudi Arabia, UAE (Jebel Ali, Dubai), Kuwait, Malaysia, Indonesia, and the UK. 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 decision will merge E&A’s wide domestic reach, coupled with acclaimed R&D and manufacturing capabilities with Schneider Electric’s strong technology platform, digital offerings and global presence. 

 

The E&A business reported net revenue of ₹5,038 crore ($754 million) during FY2016-17. 

 

Commenting on the occasion A M Naik, group chairman, Larsen & Toubro, said: “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, would further enhance the business prospects for E&A business and its employees.” 

 

S N Subrahmanyan, CEO & MD, Larsen & Toubro, said: “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 switchgear and Servowatch Systems. 

 

Larsen & Toubro is engaged in technology, engineering, construction, manufacturing and financial services with over $17 billion in revenue. It operates in over 30 countries worldwide.  - TradeArabia News Service