Engineering and construction major Larsen & Toubro on Thursday said it would acquire Tamco Switchgear Malaysia Sdn Bhd, the de-merged switchgear business of Malaysia-based Tamco Corporate Holdings Bhd.
In this regard, the firm entered into a share sale agreement with Tamco Corporate Holdings Bhd in Kuala Lumpur on Thursday, according to a filing with the Bombay Stock Exchange. However, the financial details of the deal are not disclosed.
“Tamco has a strong presence in the medium voltage (MV) category. With this acquisition, L&T will be able to offer a comprehensive range of MV switchgear in the domestic as well as international markets. This deal meets our requirements on both fronts of technology acquisition and market access.
“L&T’s process improvement initiatives will help achieve cost efficiency and contribute to synergy benefits,” said L&T President (Operations) and Member of the Board R N Mukhija.
Tamco is a major player in MV switchgear in Malaysia. The Middle East and Malaysia together contribute to over 50 per cent of its revenues.
With this buyout, L&T will have access to the fast growing MV switchgear markets like the Middle East, apart from strengthening its capability in both LV with MV categories.
The acquisition would also allow the firm to offer turnkey solutions to customers.
The deal was signed by R N Mukhija and Tamco’s Chairman Abdul Latif bin Abdullah and Deputy Chairman Siew Ka Wei.
Further, both firms plan to enter into three other share sale agreements for acquiring Tamco’s switchgear manufacturing subsidiaries Tamco Shanghai Switchgear Co Ltd in China, Tamco Electrical Industries Australia Pty Ltd in Australia and PT Tamco Indonesia in Indonesia.
The domestic MV Switchgear market is growing at 15 per cent per annum and the growth rate is expected to increase further in the next five years.
L&T is one of the leading global manufacturers of low voltage switchgear. It has four manufacturing facilities for switchgear operations in India and one each in China and Saudi Arabia.