Schneider Electricexpects to complete the ₹14,000 crore acquisition of Larsen & Toubro’s electrical and automation business by early 2020, its India head Anil Chaudhry said on Wednesday.
In May last year,Schneider Electric, a global player in energy management and automation, together with Singapore’s state investment firm Temasek Holdings had announced an all-cash buyout of L&T’s electrical and automation business.
“We expect the deal to close in the next few months… maybe end of the year or early next year,” said Chaudhry, zone president and managing director of Schneider Electric India Pvt Ltd.
Schneider, he said, has a “very strong commitment” to India which it sees as the future growth engine of the world.
Also, the country’s vision to become a developed nation from a developing one now would need massive infrastructure building and Schneider Electric can “play a strong role,” he said.
The deal has already got approval from the anti-monopolistic body Competition Commission of India (CCI).
The acquisition will catapult India just behind the US and France in Schneider’s business size from the current fifth or sixth position, he said.
“More importantly, with this India will be a very strong fourth engineering and manufacturing hub for the group. Today we have three hubs – one in France, one in China and one in the US. With this (deal) we will be setting up the fourth hub in India,” he added.
Chaudhry said Schneider Electric and L&T’s electrical business have a strong complementary role as it would widen the offering for customers.
“L&T’s electrical automation business has a very strong team, a very strong engineering capability, and R&D capability. This can also contribute to Schneider Electric’s growth in new and developing economies especially in the Middle East, Africa and East Asia where we can export more,” he said.
Schneider Electric has a consortium with Temasek Holdings for the transaction. Under the proposed deal, both partners will make fresh investments in Schneider’s wholly-owned subsidiary, Schneider India, which in turn will buy out L&T Electrical & Automation.
After the transaction is completed, Schneider Electric will have a 65% stake in the company, while the remainder will be held by Temasek.