Larsen & Toubro (L&T) Ltd. announced the completion of the disinvestment of its electrical and automation (E&A) business to Schneider Electric for ₹14,000 crore.
The divestment deal, announced in May 2018, has been completed after receiving the requisite regulatory approvals and fulfilment of necessary conditions, the company said in a statement.
The manufacturing facilities of E&A business in Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysuru in India and related subsidiaries in UAE, Kuwait, Malaysia and Indonesia will be transferred to Schneider Electric.
The subsidiary in Saudi Arabia, L&T Electrical & Automation Saudi Arabia Company Ltd (LTEASA), will be transferred to Schneider, once the requisite regulatory approvals are in place, L&T said.
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, it said.
Now the company will get the money from this deal and this will help it during this tough period, company executives said.
“This all-cash deal will help us us create a much stronger balance sheet, creating long-term value opportunities for our our stakeholders by focusing on key aspects of business,” said S. N. Subrahmanyan, CEO and MD, L&T.
“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.”
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