Larsen sees March date for as­set sales to fuel IT buy­ing spree

The Star Malaysia - StarBiz - - Foreign News -

MUM­BAI: Larsen & Toubro Ltd, In­dia’s largest en­gi­neer­ing and con­struc­tion group, said it ex­pects to sell its elec­tri­cal unit and spin out its road as­sets trust by March 2018, a sign fund­ing for plans to ac­quire more com­pa­nies in in­for­ma­tion tech­nol­ogy will soon be in place.

Sch­nei­der Elec­tric SE is in ex­clu­sive talks to buy the elec­tri­cal unit, valu­ing it at around US$2bil, peo­ple fa­mil­iar with the mat­ter said last week. Due dili­gence is un­der­way, as are talks with in­vestors on an ini­tial pub­lic of­fer­ing for some road as­sets, Larsen chief fi­nan­cial of­fi­cer R Shankar Ra­man said in a Nov 20 in­ter­view.

The air­ports-to-sub­marines maker has been prun­ing non-strate­gic and sub-scale busi­nesses un­der a plan to spur growth through ac­qui­si­tions in in­for­ma­tion tech­nol­ogy, where mar­gins are higher.

The push into IT is ur­gent, said Ra­man, as Larsen must con­tend with big­ger, more en­trenched ri­vals in­clud­ing Tata Con­sul­tancy Ser­vices Ltd and In­fosys Ltd.

“We don’t have time on our side and we need to jump start for bridg­ing the gap,” Ra­man said. “Ac­qui­si­tions would be one of the ways to do that.”

He de­clined to iden­tify any deal tar­gets, though he said the com­pany is look­ing to buy busi­nesses that can’t scale up on their own.

The firm is look­ing in Sil­i­con Val­ley and In­dia for deals val­ued at be­tween US$20mil and US$100mil, Ra­man said.

“Whether it is an­a­lyt­ics, mo­bil­ity, cloud or ar­ti­fi­cial in­tel­li­gence, they are all op­por­tu­ni­ties for us to draw closer to larger peers,” he said.

The L&T Tech­nol­ogy unit ac­quired US-based Esen­cia Tech­nolo­gies Inc in June for US$27mil, it said in a fil­ing.

Ear­lier this month, the L&T In­fotech unit said it plans to ac­quire Lux­em­bourghead­quar­tered Syn­cordis SA for 15 mil­lion eu­ros (US$18mil). — Bloomberg

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.