L&T Infotech and Mindtree to merge to create $22-bn firm: Report
- IBEF
- April 19, 2022
Larsen & Toubro Ltd. is considering merging two of its publicly held software subsidiaries as the Indian conglomerate seeks scale to compete with global digital titans. The boards of Mindtree Ltd. and Larsen & Toubro Infotech Ltd, two software divisions controlled by the Mumbai-based engineering firm, could explore share swap ratios for the merger. The two companies have little overlap in terms of industries or clients, and a merger would give them better pricing power and cheaper costs.
According to Bloomberg data, the conglomerate owns a 61% investment in the company, which has a market capitalization of US$ 8.3 billion, and a 74% stake in L&T Infotech, which has a market capitalization of US$ 13.6 billion.
The planned merger comes at a time when software companies are facing increased demand from enterprises adopting digitization, which has accelerated since Covid-19. Moving beyond lower-margin traditional back-room services, large IT outsourcing firms are growing into areas such as cybersecurity, automation, and machine-learning support.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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