The combined business will offer a comprehensive portfolio of products and solutions in India at competitive prices, for large partners and customer base in many segments, across geographies.
Schneider Electric, the global leader in digital transformation of energy management and automation today announces the signing of an agreement with Larsen and Toubro Ltd (L&T), a leading conglomerate in India to buy its Electrical and Automation business (L&T E&A) and combine it with Schneider Electric India’s Low voltage and Industrial Automation Product business. Temasek, an investment company headquartered in Singapore, will invest in the combined business and will hold 35 per cent of it.
L&T E&A is a recognised player in the Energy Management and Industrial Automation business in India led by an experienced management team. It offers low and medium voltage switchgear, electrical systems and equipment, energy management, metering and industrial automation solutions. It benefits from an extensive ecosystem of partners covering more than 260 cities in India. It has an efficient local manufacturing footprint with five manufacturing locations in India along with robust local R&D capabilities. The company is also present in the Middle-East and South-East Asia markets. L&T E&A has over 5,000 employees, excluding Marine Switchgear and Servowatch Systems.
India is the third largest economy in Asia Pacific and sixth largest in the world with $2.6 trillion GDP. It is also the fastest growing large economy globally with an expected 2018 GDP growth rate of 7.4 per cent (based on IMF data). With strong growth in the buildings and infrastructure segments coupled with growth in industrial manufacturing driven notably by the Indian Government’s program to develop industries through ‘Make in India’, the market is expected to grow high-single digit to double-digit for energy management offers and double-digit for industrial automation offers over the coming years. The combined business of Schneider Electric’s Low Voltage and Industrial Automation Product business and L&T E&A will be uniquely positioned to benefit from these trends.
Schneider Electric is committed to investing in India’s growth, with its businesses being present in India since 1963. With this transaction, India will become the third largest country for Schneider Electric in terms of revenues at par with France.
Temasek is a global investor anchored in Asia, with India accounting for around 5 per cent net portfolio value based on underlying assets, as at 31 March 2017. Temasek’s investment deepens its exposure to India, as well as to the industrial sector. Temasek and Schneider Electric both recognize India’s significant growth opportunities, further accentuated by the Indian Government’s Make in India policy. Make in India seeks to promote growth in the domestic market, establish India as a strong R&D hub and enhance production capabilities to service the Indian market and new economies, using India as a hub. With this combination, Schneider Electric and Temasek are establishing a company with scale, efficiency and channel partner outreach across India. It will offer innovative products and solutions to Indian customers, bringing differentiation in a dynamic and competitive market having many major global and local low voltage switchgear players.
The combined business with more than €1 billion in revenues will create significant synergies and efficiencies by leveraging on the complementary businesses of Schneider and L&T E&A business, including: