All-cash deal to help unlock value for future growth
MUMBAI: Larsen & Toubro (L&T), India’s leading engineering, technology, construction and financial services conglomerate on Monday 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 a 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,” a company statement explained.
Its exit from the Electrical & Automation Business is a part of the strategic portfolio review process. Commenting on the closure of this divestment, A.M. Naik (seen in the picture) , Group Chairman, Larsen & Toubro said the closure of divestment of the E&A business is a key milestone in the company’s 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,” Naik added.
The deal was a complex M&A transaction involving slump sale of the domestic business and share purchase transfer. This is in sync with the company strategy to look at L&T in broadly three areas, EPC Construction & Projects, Manufacturing & Defence and Services.