Mumbai: Engineering major Larsen & Toubro Ltd (L&T) on Wednesday said it has agreed to sell its entire stake in its unlisted unit L&T Cutting Tools Ltd to IMC International Metalworking Companies BV, owned by Berkshire Hathaway Inc., for Rs174 crore.
L&T Cutting Tools, incorporated in 1952, manufactures fabricated metal products.
According to a statement by L&T, revenues of L&T Cutting Tools was Rs169.46 crore in fiscal 2017, which is around 0.15% of the group’s consolidated revenues and on 31 March, the subsidiary had a net worth of Rs42.4 crore.
“Subject to customary closing conditions, the sale is expected to be completed within 90 days from the date of execution of the share sale and purchase agreement," the statement added.
The sale is part of L&T’s strategy to exit non-core businesses. L&T was in talks with ABB, the Swedish-Swiss multinational to sell its electrical and automation division, The Economic Times reported on 21 June. L&T has operations in engineering, construction, manufacturing, technology and financial services.
On Wednesday, shares of L&T dropped 0.43% to close at Rs1,141.65 on BSE, while the benchmark Sensex rose 1.02% to 31,770.89 points.
The acquirer IMC International is owned by Warren Buffett- led Berkshire Hathaway. In the early part of Buffett’s career at Berkshire, he focused on long-term investments in publicly traded companies but more recently, has turned to buying whole companies. Berkshire now owns a diverse range of businesses and is the fifth-largest public company in the world today.