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Larsen & Toubro Ltd. is in talks to merge its thermal power business with the Indian unit of Singapore-based Sembcorp Industries Ltd., according to people with knowledge of the matter.

The share-swap deal will help India’s largest engineering conglomerate pare debt, the people said, asking not to be identified as the deliberations are private. The transaction could value the combined business at around $4.5 billion including debt, one of the people said.

L&T is considering moving as much as 10,000 crore ($1.3 billion) of debt to the merged entity, according to the person. It may eventually seek a separate listing for the power business after the deal, the person said.

Deliberations are ongoing, and details of the potential transaction could change or talks could fall apart, the people said.

A representative for L&T didn’t immediately respond to requests for comment, while a representative for Sembcorp couldn’t immediately comment. 

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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