Schneider gets CCI nod for Rs 14k-crore takeover of L&T unit

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Published: April 19, 2019 12:32:31 AM

The approval is “subject to compliance of certain modifications”, the CCI said on Twitter. Schneider would partner with MacRitchie, a wholly-owned subsidiary of Singapore-based Temasek Holdings, to complete the acquisition.

CCI gives nod to Schneider’s Rs 14k-cr takeover of L&T unit CCI gives nod to Schneider’s Rs 14k-cr takeover of L&T unit

The Competition Commission of India (CCI) has approved the acquisition of Larsen & Toubro’s (L&T) electrical and automation business by Schneider Electric. According to information provided by L&T earlier to the stock exchange, the deal was valued at `14,000 crore. The two companies entered into a business transfer agreement for the acquisition in May, 2018.

The approval is “subject to compliance of certain modifications”, the CCI said on Twitter. Schneider would partner with MacRitchie, a wholly-owned subsidiary of Singapore-based Temasek Holdings, to complete the acquisition.

“Schneider Electric received today the communication from CCI for approval of our acquisition of L&T’s electrical and automation business. Detailed order will be issued subsequently,” the company said in its response to FE’s query. “We will issue a press release after receiving the final order,” it added.

The sale is part of L&T’s long term divestment strategy of selling its non-core businesses. The business units being sold by L&T also include some of its overseas subsidiaries in Malaysia, Australia, Indonesia, Saudi Arabia and Kuwait. The company’s FY17 automation business revenue of `5,038 crore constituted around 4.5% of its consolidated revenue.

The acquisition would allow Schneider India to access L&T’s distribution network in over 260 tier II and tier III cities and rural areas where it currently does not have significant presence. The company was banking on the completion of the deal to develop India as its “fourth hub”, after US, France and China. It has made investments of 30 million euro (about `260 crore) annually in the last three years in this country. Peter Herweck, executive vice president, industry automation business, Schneider Electric had told FE that depending on how soon the L&T acquisition takes place, the company plans to make India its third largest investment destination globally by 2020.

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