Schneider Electric Expects to Complete Rs 14,000 Crores L&T Deal by Early 2020

In May last year, Schneider Electric together with Singapore's Temasek Holdings had announced an all-cash buyout of L&T's electrical and automation business

September 12, 2019. By News Bureau

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Schneider Electric has announced that it anticipates to complete the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020, its India head Anil Chaudhry said.

In May last year, Schneider Electric together with Singapore's Temasek Holdings had announced an all-cash buyout of L&T's electrical and automation business.

"We expect the deal to close in the next few months... maybe end of the year or early next year," said Chaudhry, zone president and managing director of Schneider Electric India Pvt Ltd.

Schneider, he said, has a "very strong commitment" to India which it sees as the future growth engine of the world.

Also, the country's vision to become a developed nation from a developing one now would need massive infrastructure building and Schneider Electric can "play a strong role," he said.

The deal has already got sanction from the anti-monopolistic body Competition Commission of India (CCI).

The acquisition will propel India to the number three country in Schneider group globally in terms of business from the current fifth or sixth position, he said.

"More importantly, with this India will be a very strong fourth engineering and manufacturing hub for the group. Today we have three hubs - one in France, one in China and one in the US. With this (deal) we will be setting up the fourth hub in India," he added

Chaudhry said Schneider Electric and L&T's electrical business have a strong complementary role as it would widen the offering for customers.

"L&T's electrical automation business has a very strong team, a very strong engineering capability, and R&D capability. This can also contribute to Schneider Electric's growth in new and developing economies especially in the Middle East, Africa and East Asia where we can export more," he said.

After the transaction is completed, Schneider Electric will have a 65 per cent stake in the company, while the remainder will be held by Temasek.

Chaudhry was speaking at the launch of EcoStruxure Power & Process (EP&P) -- an internet of things (IoT) solution created in partnership with Microsoft for energy management and automation which will drive efficiencies up while reducing operating and capital expenditure by 20-30 per cent.

He said against the typical model of power and process management systems operating as separate silos, Schneider's latest offering will help companies in oil, gas, and petrochemical sector plan better and solve critical engineering and operating challenges.

"This can result in better returns on capital employed (ROCE), with a 20 per cent reduction in capex, 15 per cent reduction in downtime, and 3 per cent growth in profitability," he said.

By leveraging EcoStruxure IoT-enabled system architecture and platform, customers can connect assets that are the centre of their projects with assets that are at the centre of their operations across the full lifecycle of their plants, including their supply chains.

By offering both tangible IoT solutions that are available today as well as leading-edge innovation to address future needs, customers will benefit from the blend of domain/subject matter expertise from Schneider Electric and industry-leading cloud technology from Microsoft.

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