NEW DELHI: Engineering and construction major Larsen & Toubro on Tuesday signed a definitive agreement with Schneider Electric for strategic divestment of its electrical and automation (E&A) business for an all-cash deal of Rs 14,000 crore.
The said business reported net revenue of Rs 5,038 crore in FY17. The deal is subject to regulatory approvals.
The divestment of the E&A business is in line with L&Ts stated intent of unlocking value within the existing business portfolio to streamline and lay capital and management focus on creating long-term value for our stakeholders, said CEO and MD S N Subrahmanyan.
The transaction includes all the current business segments of E&A except marine switchgear and Servowatch Systems, Subrahmanyan said.
Schneider Electric is a global player in energy management and automation business.
The E&A business of L&T deals in manufacturing of low and medium voltage switchgear, electrical systems, marine switchgear, industrial and building automation solutions, energy management and metering solutions, among others.
“L&Ts E&A business has had a strong presence for decades and is well-positioned to continue its growth trajectory with outstanding technologies, brands, people and global presence. We believe that the partnership with Schneider Electric, which has a strong product and geographic presence, would further enhance the business prospects for E&A business and its employees,” said A M Naik, Group Chairman, Larsen & Toubro.
The E&A business has manufacturing facilities in Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysore in India as well as in Saudi Arabia, the UAE (Jebel Ali, Dubai), Kuwait, Malaysia, Indonesia, and the UK.