“L&T completes Divestment of the Electrical & Automation Business to Schneider Electric”
Shardul
Amarchand Mangaldas (SAM) Legal Advisors, Ernst & Young (EY) LLP
and Arpwood Capital acted as advisors to L&T on this transaction.
Highlights:
1. The
divestment deal announced in May 2018 has been completed after
receiving the requisite regulatory approvals and fulfilment of necessary
conditions
2. L&T continuously evaluates its business portfolio and takes capital allocation decisions from a long-term perspective
3. Its exit from the Electrical & Automation Business is a part of the strategic portfolio review process
4. About 5,000 employees of the E&A business will become part of Schneider Electric’s global family
5. The
manufacturing facilities of E&A in Navi Mumbai, Ahmednagar,
Vadodara, Coimbatore and Mysuru in India and related subsidiaries in
UAE, Kuwait, Malaysia and Indonesia are also being transferred to
Schneider Electric
6. The subsidiary in Saudi Arabia, L&T Electrical & Automation Saudi Arabia Company Limited (LTEASA), will be transferred to Schneider, once the requisite regulatory approvals are in place
7. L&T,
over the past five years, in line with its strategy to focus on the EPC
and Services business, has exited several businesses. The divestment is
in line with L&T’s stated goal of unlocking value for future growth
and this deal with Schneider Electric will further strengthen the
balance sheet
This strategic divestment is in line with L&T’s stated goal of unlocking value
for future growth
for future growth
Larsen & Toubro (L&T), India’s leading engineering, technology,
construction and financial services conglomerate, today announced the
closure of the strategic divestment of its Electrical & Automation
(L&T E&A) business to Schneider Electric, a global player in
energy management and automation.
The
significant and complex divestment deal, one of its kind in India
announced in May 2018 has been completed after receiving the requisite
regulatory approvals and fulfilment of necessary conditions. The
divestment is in line with L&T’s stated goal of unlocking value for
future growth. L&T continuously evaluates its business portfolio and
takes capital allocation decisions from a long-term perspective. Its
exit from the Electrical & Automation Business is a part of the
strategic portfolio review process.
Commenting on the closure of this divestment, Mr. A.M. Naik, Group Chairman, Larsen & Toubro said: “The
closure of divestment of the E&A business is a key milestone in our
stated long-term strategy. The challenge was to carve out a business of
this scale, with minimum disruption to the sprawling customer base and
do it all amid the constraints of a pandemic. We believe Schneider
Electric is the right partner to grow the business, that L&T had
nurtured and grown over decades. We truly believe that this deal with
Schneider Electric is a win-win for our employees, business partners,
and shareholders.”
Mr. S. N. Subrahmanyan, CEO & MD, Larsen & Toubro said: “This
all-cash deal will help us create a much stronger balance sheet,
thereby creating long-term value opportunities for our stakeholders by
focusing on key aspects of business. The deal was a complex M&A
transaction involving slump sale of the domestic business and share
purchase transfer. This is in sync with our strategy to look at L&T
in broadly three areas, EPC Construction & Projects, Manufacturing
& Defence and Services.”
L&T’s
E&A business with its wide range of low and medium voltage
switchgear, electrical systems, industrial and building automation
solutions, energy management systems, metering solutions and projects
and services business are transferred to Schneider Electric. Schneider
Electric will use related brand insignia for a specified period as the
brand is very popular and has a strong brand recall in the switchgear
market.
About
5,000 employees of the E&A business will become part of Schneider
Electric’s global family. The manufacturing facilities of E&A in
Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysuru in India and
related subsidiaries in UAE, Kuwait, Malaysia and Indonesia are also
being transferred to Schneider Electric. In view of the pending local
approvals, the subsidiary in Saudi Arabia, L&T Electrical &
Automation Saudi Arabia Company Limited (LTEASA), will be transferred to Schneider, once the requisite regulatory approvals are in place.
L&T,
over the past five years, in line with its strategy to focus on the EPC
and Services business, has exited several businesses. The recent
divestment of its stake in ports, insurance, road concessions and other
businesses have all unlocked value and this deal with Schneider Electric
will further strengthen the balance sheet.
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