Larsen & Toubro (L&T) has announced the closure of the strategic divestment of its electrical and automation (L&T E&A) business to Schneider Electric, after receiving the requisite regulatory approvals and fulfilment of necessary conditions. L&T had inked a definitive pact with Schneider Electric in May 2018 to sell its electrical and automation business for an all-cash consideration of Rs 140 billion, as part of its long-term strategy to exit non-core activities.The divestment is in line with L&T’s stated goal of unlocking value for future growth. L&T continuously evaluates its business portfolio and takes capital allocation decisions from a long-term perspective. Its exit from the electrical and automation business is a part of the strategic portfolio review process.
L&T’s E&A business with its wide range of low and medium voltage switchgear, electrical systems, industrial and building automation solutions, energy management systems, metering solutions and projects and services business are transferred to Schneider Electric. The manufacturing facilities of E&A in Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysuru in India and related subsidiaries in UAE, Kuwait, Malaysia and Indonesia are also being transferred to Schneider Electric, while the subsidiary in Saudi Arabiawill be transferred once the requisite regulatory approvals are in place.
Shardul Amarchand Mangaldas Legal Advisors, Ernst & Young LLP and Arpwood Capital acted as advisors to L&T on this transaction.