L&T sells business division to subsidiary L&T for Rs 800 cr

CHENNAI: In a Rs 800 crore deal, engineering services company L&T Technology Services Ltd will acquire the Smart World & Communication (SWC) business of Larsen & Toubro Ltd (L&T), the companies said on Thursday.

According to L&T, the revenue of the carved-out business for FY 2021-22 was Rs 1,098 crore (including inter-segment revenues) and networth was Rs 440 crore.

The business transfer to L&T Technology Services will be on slump sale basis.

According to L&T, the SWC business comprises the smart and safe segment and communications segment (including all software platforms, IPs related to these segments and employees) of SWC business. The transaction excludes the military communications segment and certain identified customer contracts.

The business transfer transaction is expected to be closed on or before March 31, 2023, subject to satisfaction of conditions precedent identified under the agreement, L&T said.

L&T Technology Services is a listed subsidiary of L&T with the latter owning 73.85 per cent.

"Smart World & Communication has created a niche for itself in the communications and smart spaces domain across developing markets. By combining with a global engineering services player like LTTS (L&T Technology Services), its offerings across next-gen networks, smart spaces, and cybersecurity will help unlock new synergies across the technology spectrum. LTTS is well-positioned to take these capabilities to the global market, cementing its robust leadership in the engineering and technology domain," L&T Chief Executive Officer & Managing Director S.N. Subrahmanyan said.

According to L&T Technology Services CEO & Managing Director, Amit Chadha, the acquisition of SWC is a progression of LTTS' 6 Big Bets strategy with a direct bearing on 5G, Digital Products and artificial intelligence (AI), and sustainability.

He said that SWC's capabilities will enhance L&T Technology Services' differentiation in the exciting field of next-gen communications with cutting edge solutions around 5G networks, sustainable spaces, along with a full stack of cyber security solutions to its global clientele.