Schneider Electric to buy Larsen & Toubro’s Electrical & Automation business
Schneider Electric, partnering with Temasek, has reached an agreement to buy Larsen & Toubro’s Electrical & Automation business and will combine it with its Low Voltage & Industrial Automation Products business in India.
Schneider Electric, the global leader in digital transformation of energy management and automation announces the signing of an agreement with Larsen and Toubro Ltd. (L&T), a leading conglomerate in India to buy its Electrical and Automation business (L&T E&A)1 and combine it with Schneider Electric India’s Low voltage and Industrial Automation Products business2 (the Combined Business). Temasek, an investment company headquartered in Singapore, will invest in the combined business and will hold 35% of it.
L&T E&A is a recognized player in the Energy Management and Industrial Automation business in India led by an experienced management team. It offers low and medium voltage switchgear, electrical systems & equipment, energy management, metering and industrial automation solutions. It benefits from an extensive ecosystem of partners covering more than 260 cities in India. It has an efficient local manufacturing footprint with five manufacturing locations in India along with robust local R&D capabilities. The company is also present in the Middle-East and South-East Asia markets. L&T E&A has over 5,000 employees, excluding Marine Switchgear and Servowatch Systems.
India is the third largest economy in Asia Pacific and sixth largest in the world with c.US$ 2.6 trillion GDP. It is also the fastest growing large economy globally with an expected 2018 GDP growth rate of 7.4% (based on IMF data). With strong growth in the buildings and infrastructure segments coupled with growth in industrial manufacturing driven notably by the Indian Government’s program to develop industries through ‘Make in India’, the market is expected to grow high-single digit to double-digit3 for energy management offers and double-digit3 for industrial automation offers 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 uniquely positioned to benefit from these trends.
Schneider Electric is committed to investing in India’s growth, with its businesses being present in India since 1963. With this transaction, India will become the third largest country for Schneider Electric in terms of revenues (c. €1.6bn), at par with France.
Jean-Pascal Tricoire, Schneider Electric, Chairman and CEO stated, “By bringing together the Low Voltage and Industrial Automation Products Business of Schneider Electric India and L&T E&A, we are creating an innovative company in Energy Management and Industrial Automation in one of world’s largest and fastest growing economies – India. Our market reach in India will be further strengthened by the extensive ecosystem of partners of E&A and we will harness the strengths of both organizations to address the electrical and automation requirements of India and global market. India will become our third largest business in the world, and one of our four major R&D and manufacturing global hubs. Our combined company will actively contribute to make India green, digital, and reinforce its role as a center for R&D and manufacturing. We are pleased to partner with Temasek which brings a tremendous expertise of Asian markets.”