Sources reveal Larsen weighs merging tech arms into a $22 billion firm
- ByStartupStory | April 18, 2022
According to sources, Larsen & Toubro Ltd. is currently weighing a merger between two of its publicly traded software firms as the Indian tech major seeks scale to compete with global digital giants
The boards of Larsen & Toubro Infotech Ltd and Mindtree Ltd. could consider share swap ratios for the merger as early as next week, one of the sources who refused to be named said.
Larsen acquired control of Mindtree in the year 2019. The conglomerate holds nearly 61% stake in the company, which has a market value of 8.3 billion USD, and has about 74% of L&T Infotech, which has a market capitalization of about 13.6 billion USD, data compiled by Bloomberg indicate.
The two companies have minimal overlap in clients or businesses, and a tie-up would give them more pricing power and lower costs, one of the sources said
Deliberations with respect to the merger are ongoing, and the plan could be delayed or fall apart, according to people familiar with the matter.
The proposed merger discussion comes amidst the atmosphere where software firms are seeing surging demand from businesses embracing the digitization that accelerated during the pandemic. Large IT outsourcing companies are currently expanding into areas that include cybersecurity, automation, machine-learning support, etc.
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