L&T unit’s sale to Schneider closed

MUMBAI: Larsen and Toubro Ltd (L&T) on Monday announced the closure of the strategic divestment of its electrical and automation (E&A) business to Schneider Electric, a global player in energy management and automation, for ₹14,000 crore in an all-cash deal. L&T said it will use the proceeds of the deal for long-term capital allocation decisions.

The transaction, which was first announced in May 2018, was completed after receiving regulatory approvals and fulfilment of necessary conditions. L&T said its exit from the E&A business is a part of the strategic portfolio review process.

“The closure of divestment of the E&A business is a key milestone in our 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,” said AM Naik, group chairman, L&T.

“We believe Schneider is the right partner to grow the business that L&T has nurtured and grown over decades. We truly believe that this deal with Schneider is a win-win for our employees, business partners, and shareholders.”

Post the deal, Schneider will use related brand insignia for a specified period as it is popular and has a strong brand recall in the domestic switchgear market.

“This all-cash deal will help us create a much stronger balance sheet, thereby creating longterm value opportunities for our stakeholders by focusing on key aspects of business,” said SN Subrahmanyan, CEO and MD, L&T.