MUMBAI: Engineering major Larsen & Toubro (L&T) on Tuesday said it had signed a definitive agreement with Schneider Electric to divest stake in its Electrical and Automation (E&A) business for an all-cash consideration of Rs 14,000 crore.
The proposed deal, subject to approvals, is part of the infrastructure giant’s strategy to offload stake in non-core assets, streamline operations and pare mounting debt. The transaction also includes all the current business segments of E&A except marine switchgear and Servowatch Systems.
“Larsen & Toubro, India’s leading engineering technology and construction conglomerate, on Tuesday 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 Rs 14,000 crore,” the company said in a statement.
It may be noted that L&T’s electric unit, which makes switchboards, energy meters and management systems, has manufacturing presence in Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysore. Outside India, the company has operations in Saudi Arabia, the UAE, Kuwait, Malaysia, Indonesia and the UK. As per L&T’s website, the E&A business reported net revenue of Rs 5,038 crore during the financial year 2016-17.
“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,” said SN Subrahmanyan, CEO & MD, L&T.