L&T said to agree to sell its electrical unit to Schneider for $2.1 billion

Mumbai/London: Larsen & Toubro Ltd., India’s largest engineering and construction company, has agreed to sell its electrical unit to a consortium led by Schneider Electric SE, people with knowledge of the matter said.

A deal, which values Larsen’s electrical and automation division at about Rs14,000 crore ($2.1 billion) including debt, could be announced as soon as this week, said the people, who asked not to be identified because the details are private. Schneider will own 74% of the unit when the deal is complete, while Temasek Holdings Pte will own the balance, the people said.

The company, which makes submarines ,and builds airports to nuclear power plants, has been pruning non-strategic and sub-scale businesses. It plans to spur growth through acquisitions in information technology. The Mumbai-based firm had expected to sell the electrical division by March, chief financial officer R. Shankar Raman said in a 20 November interview.

A representative for Temasek said the firm doesn’t comment on market rumors, while spokesmen for Larsen and Schneider declined to comment.

The Economic Times reported earlier that Larsen and the consortium had resumed talks after a months-long lull and that a deal would likely be announced by the end of April, citing people it didn’t identify.

The electrical unit, which makes switchboards, energy meters and management systems, has manufacturing operations in India, the Middle East and Europe, according to its website. The division’s net revenue for the nine months ended 31 December was up 12% to Rs3,590 crore, a company presentation shows. Bloomberg