An employee works on an electric switchboard unit. (Photographer: Dhiraj Singh/Bloomberg)

L&T Is Said to Agree to Sell Unit to Schneider for $2.1 Billion

(Bloomberg) -- Larsen & Toubro Ltd., India’s largest engineering and construction company, has agreed to sell its electrical unit to a consortium led by Schneider Electric SE, people with knowledge of the matter said.

A deal, which values Larsen’s electrical and automation division at about 140 billion rupees ($2.1 billion) including debt, could be announced as soon as this week, said the people, who asked not to be identified because the details are private. Schneider will own 74 percent of the unit when the deal is complete, while Temasek Holdings Pte will own the balance, the people said.

The company, which makes submarines and builds airports and nuclear power plants, has been pruning non-strategic and sub-scale businesses. It plans to spur growth through acquisitions in information technology. The Mumbai-based firm had expected to sell the electrical division by March, Chief Financial Officer R. Shankar Raman said in a Nov. 20 interview.

A representative for Temasek said the firm doesn’t comment on market rumors, while spokesmen for Larsen and Schneider declined to comment.

The Economic Times reported earlier that Larsen and the consortium had resumed talks after a months-long lull and that a deal would likely be announced by the end of April, citing people it didn’t identify.

The electrical unit, which makes switchboards, energy meters and management systems, has manufacturing operations in India, the Middle East and Europe, according to its website. The division’s net revenue for the nine months ended December 31 was up 12 percent to 35.9 billion rupees, a company presentation shows.

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