Larsen & Toubro To Sell U.K. Unit To Rolls-Royce, Shares Decline
Larsen & Toubro Ltd. will sell its U.K. marine automation unit to Rolls-Royce Holdings PLC as part of its plan to offload non-core businesses to unlock value.
Larsen & Toubro International, a wholly owned subsidiary of the Mumbai-based infrastructure and engineering group, signed a pact with Rolls-Royce to divest Servowatch Systems, according to an exchange filing. The subsidiary provided integrated marine automation solutions for navies, commercial vessels and large yachts.
L&T didn't disclose financial details. The unit has 44 employees in India and the U.K.
"The divestment of Servowatch Systems is as per our stated goal of unlocking value within the existing business portfolio by divesting non-core units," SN Subrahmanyan, managing director and chief executive officer at L&T, said in a statement.
The company earlier concluded the strategic divestment of its electrical and automation business to Schneider Electric.
Shares of L&T fell as much as 1% after the announcement, trading lower for the second straight day.
Of the 41 analysts that track Larsen & Toubro, 38 have a 'buy' recommendation, two suggest 'hold' while one has a 'sell' call, according to Bloomberg data. The average pf 12-month price targets suggest an upside potential of 9.6%.