Reuters

Mumbai: India’s top engineering firm, Larsen & Toubro Ltd, is buying the switchgear businesses of Malaysia’s Tamco in Malaysia, Australia, China and Indonesia for about $110 million, an official said.

R.N. Mukhija, president of operations at Larsen who is in Malaysia to sign the deal with Tamco Corporate Holdings Bhd, told Reuters by telephone on Thursday, 11 October, the planned acquisition would complement Larsen’s offerings in the switchgear sector.

Larsen chairman A.M. Naik earlier told CNBC-TV18 the company was paying $108 million for the acquisition.

Switchgears control the flow of energy in electrical power systems.

Larsen has a 40% share of the low-voltage switchgear market in India, Mukhija said, while the Tamco units specialise in medium-voltage switchgear and are present in many countries.

“It’s a great fit,” he said.

Mukhija said the acquisition would help double revenues at Larsen’s electrical and electronics division to $1 billion by the year to March 2010.

India’s market for medium-voltage switchgears was growing at 15 percent a year and is expected to expand at a faster rate in the next five years, Larsen said in a statement.

Shares in Larsen & Toubro were up 3% at Rs3,474 in afternoon trade, after hitting a record Rs3,500. The second best performing stock on the Sensex has risen more than 140% so far this year.