Schneider Electric has entered into definitive agreement with Larsen & Turbo. Schneider will buy electrical & automation business for an all-cash consideration of Rs 14000 crore of Larson & Turbo, a leading Indian conglomerate. Schneider is a global company in the area of energy management and automation.
Schneider Electric has formed a consortium with Singapore’s state investment firm Temasek Holdings for the transaction. Under the proposed deal, both partners will make fresh investments in Schneider’s wholly owned subsidiary, Schneider India, which in turn will buy out L&T Electrical & Automation.
Schneider will be one of the biggest stockholder of L & T, a 65% stake will be held by Schneider Electric in the company after the transaction compeleted. Temasek will hold the remainer. In a statement Schneider said that Temasek will invest Rs 5,075 crore cash as it's share of the equity. Schneider Electric also has a listed Indian subsidiary, Schneider Electric Infrastructure Ltd., in which the French multinational owns a 75% stake.
According to the report of ET on April 19 the consortium of Schneider Electric and Temasek had resumed negotiations to acquire L&T’s electrical and automation business.
Schneider has the right to appoint the chairperson and five executive directors, while Temasek will appoint three non-executives in the new board.
“By bringing together the Low Voltage and Industrial Automation Products Business of Schneider Electric India and L&T E&A, we are creating an innovative company in Energy Management and Industrial Automation in one of the world’s largest and fastest-growing economies,” Jean-Pascal Tricoire, chairman and CEO of Schneider Electric chairman and CEO said in a statement.
After the transaction compeleted India will become one of the key innovation and manufacturing hubs of Schneider Electric. The French giant plans to export to emerging markets like Middle East, South East Asia and Africa from India. Tricoire also said that India is the third-largest business of Schneider in the world, and one of four major R&D and manufacturing hubs of Schneider, and their combined company would actively contribute to make India green, digital, and reinforce its role as a centre for R&D and manufacturing.
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Source: economictimes.indiatimes.com
