Larsen & Toubro’s (L&T) agreement with Schneider to sell its electrical and automation (E&A) business in an all-cash deal for Rs 140 billion (keeping aside the marine business and Servowatch Ltd. which are currently a part of E&A business of L&T.
Santosh Yellappu, an analyst at IndiaNivesh, says, the deal valuations are fair, and the company is pursuing its objective of becoming asset-light. Earlier. Credit Suisse too, had anticipated the electrical business’ value at ₹140-160 billion.
Related Article : Benefits of Schneider’s L&T Acquisition in a Nutshell
As SEIPL (Schneider Electric India Private Limited) is a company incorporated in India and is an indirect wholly-owned subsidiary of Schneider, hence it is actively involved in the digital transformation of energy management and automation in homes, buildings, data centres and infrastructure. Therefore, the proposed combination will harness the strength of the combined entity to address the energy, electrical and automation requirements of consumers in India.
When it comes to ‘Make In India’ the main aim of the acquisition is to promote India as the leading LV (Low voltage) and industrial automation market and produce products that suit the economy and the emerging market. Moreover, provide solutions to customers and promote India as 4th global research and development hub and pro-business policies. The proposed combination will also further the government of India’s objective of “invest in India” and “Digital India”.
Hence, this proposed agreement allows Schneider India to offer more comprehensive product ranges and solution to the Indian consumer across portfolio and price point, and the combined business will be well positioned to serve the fast-growing Indian LV (low voltage) and Industrial automation market.
Moreover, it will help Schneider to move towards the tier II and tier III cities (which are over 260 cities). The proposed acquisition will help Schneider in speeding up the manufacturing footprints in pan India which will indirectly help in increasing the domestic production leading to more employment opportunities.
In the proposed acquisition by Schneider and L&T, highly focuses on investing in more research and development programmes as the core design of the products in the LV sector has been same from the last 30 years. With this deal in place, Schneider is focusing on making India the fourth hub spot for R&D.
Overlapping Products/Solution
1 Wires
2 Human Machine Interface (“HMI”)
3 Wiring devices/Wiring accessories (“WAS”)
4 Programmable Logic Controllers (“PLC”)
5 Active Harmonic Filter (“AHF”)
6 Servo
7 Low Voltage Panel and Solutions (“LV Panel and Solutions”)
8 Automatic Power Factor Correction Panels (“APFC Panels”)
9 Low Voltage Variable speed/ Frequency Drives (“LV Drives”)
10 Busways Power/ Busbar Trunking (“BBT”)
11 Digital Protective Relays/ Numerical Relays (“DPR”)
12 Medium Voltage Equipment (“MVE”)
13 Final Distribution Enclosure Systems/Distribution Board (“DBs”)
14 Changeover Switches (“COS”)
15 Electrical and Automation Solutions (“EAS”)
16 Residual Current Devices (“RCD”)
17 Final Distribution Breakers Devices/Miniature Circuit Breakers (“MCB and Isolators”) 18 Power Factor Correction Components (“PFC Components”)
19 Power Metering Products/Digital Panel Meters (“DPM”)
20 Industrial Starters
21 Motor Management Relays (“MMR”)
22 Panel Accessories
23 Outdoor Cabinets (“ODC”)
24 Air Circuit Breakers (“ACB”)
25 Moulded Case Circuit Breakers (“MCCB”)
26 Switch Disconnector Fuse (“SDF”)
27 Contactors (Including Control Contactors) (“Contactors”)
28 Motor Protection Circuit Breaker (“MPCB”)
29 Overload Relays
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