Schneider Hopes To Complete Rs 14,000 Crore L&T Deal By Early 2020
Signage is displayed on the exterior of Schneider Electric SE’s Monterrey Development and Innovation Center in Monterrey, Mexico. (Photographer: Susana Gonzalez/Bloomberg)

Schneider Hopes To Complete Rs 14,000 Crore L&T Deal By Early 2020


Schneider Electric expects to complete the Rs 14,000 crore acquisition of Larsen & Toubro Ltd.'s electrical and automation business by early 2020, its India head Anil Chaudhry said.

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.

The acquisition will catapult India to the number three country in Schneider group globally in terms of business 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 U.S.. 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 research and development 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 formed 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 percent stake in the company, while the remainder will be held by Temasek. Chaudhry was speaking at the launch of EcoStruxure Power & Process —an internet of things solution created in partnership with Microsoft for energy management and automation which will drive efficiencies up while reducing operating and capital expenditure by 20-30 percent.

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