Schneider Electric, Rueil-Malmaison, France, signed an agreement with Larsen and Toubro Ltd., a conglomerate in India, to buy its Electrical and Automation business (L&T E&A) and combine it with Schneider Electric India’s Low voltage and Industrial Automation Products business. Temasek, an investment company headquartered in Singapore, will invest in the combined business and will hold 35% of it.
L&T E&A offers low and medium voltage switchgear, electrical systems & equipment, energy management, metering and industrial automation solutions. It has over 5,000 employees and an ecosystem of partners covering more than 260 cities in India and five manufacturing locations in India. The company also has a presence in the Middle-East and South-East Asia markets.
The combined business, valued in the deal at about €1.75 billion ($2.09 billion) would be held through a joint venture wherein Schneider Electric and Temasek would hold respective ownership of 65% and 35%.
Schneider Electric’s release announcing the deal highlighted strong growth in India’s buildings and infrastructure segments coupled with growth in industrial manufacturing driven by the Indian government’s program to develop industries through a ‘Make in India’ initiative. The country’s energy management market is expected to grow at high single digit to double-digit levels and industrial automation in double digits over the coming years. The combined business of Schneider Electric’s Low Voltage and Industrial Automation Product business and L&T E&A will be positioned to benefit from these trends.
Schneider Electric has operated in India since 1963, and with this transaction India will become the third largest country for Schneider Electric in terms of revenues (around €1.6 billion or $1.9 billion), at par with its operations in France.