Schneider bets on India

The country’s biggest M&A deal of the year

Schneider Electric SE has announced that it is buying the electrical and automation business of India’s Larsen & Toubro. The purchase is a $2.1 billion deal (140 billion rupees), which makes it the most expensive M&A transaction in the Indian market in 2018.

Schneider is partnering in a 65% / 35% split with Singapore state investor Temasek. The plan is for Schneider to combine L&T’s electrical and automation products with the industrial automation and low voltage products that Schneider already sells in India. According to a report by Devidutta Tripathy and Tanvi Mehta, writing for Reuters, L&T has seen slower growth in orders during a prolonged Indian economic downturn and has wanted to divest itself of its non-core business, with the “stated intent of unlocking value within the existing business portfolio,” according to a company executive.

After the deal, which L&T said is expected to close in 18 months, India will become Schneider’s third-biggest country in terms of revenue, at par with France.

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