What does the sale of its electrical division to Schneider mean for L&T?

Let me clarify that this is not a fresh deal but the completion of the deal that was signed and finalized in May 2018. Considering the size of the deal, it took a long time to get the necessary approvals of the court and the CCI, which have just been completed.

What happened on 31 August was that Larsen & Toubro announced the completion and fruition of the sale of its electric and automation business or the E&A business to Schneider Electric for a consideration of Rs.14,000 crore.

This is in sync with L&T’s decision to exit the electrical and switchgears business as part of its larger restructuring plan for the group. As part of the deal, the 5000 employees of the E&A division of L&T will move to Schneider Electric.

Like most large corporates, L&T is also looking to monetize value from businesses that are not part of the core strategy. The longer term strategy of L&T is to focus purely on the EPC and the services business and exit by monetizing the other businesses.