Mumbai: Larsen & Toubro, India’s largest engineering and construction company, will sell its electrical and automation business to European multinational Schneider Electric for Rs14,000 crore. This is part of L&T’s stated move to prune non-core businesses. The deal is subject to receiving regulatory approvals.

The electric unit reported revenue of Rs5,038 crore in FY17, contributing 4.5% to the parent’s topline, L&T said in filing with stock exchanges. This business segment offers a range of low and medium voltage switchgear, electrical systems, marine switchgear, industrial and building automation solutions, energy management systems and metering solutions.

Its manufacturing facilities are located at Navi Mumbai, Ahmednagar, Vadodara, Coimbatore and Mysore in India as well as in Saudi Arabia, UAE (Jebel Ali, Dubai), Kuwait, Malaysia, Indonesia, and the UK.

The sale to Schneider covers all segments of electrical and automation (E&A) business except marine switchgear and Servowatch Systems.

In its press statement, S.N. Subrahmanyan, CEO & MD, Larsen & Toubro said: “The divestment of E&A business is in line with L&T’s stated intent of unlocking value within the existing business portfolio to streamline and allocate capital and management focus for creating long-term value for our stakeholders. We believe the partnership with Schneider is win-win for our employees, business partners, and shareholders." The transaction includes all the current business segments of E&A except marine switchgear and Servowatch Systems.

A report by Bloomberg said after the deal, Schneider will own 74% of the unit while Temasek Holdings Pte will own the balance.

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