L&T Infotech, Mindtree Will Merge to Create $3.5-Billion IT Services Company

L&T Infotech, Mindtree Will Merge to Create $3.5-Billion IT Services Company

Larsen & Toubro Infotech and Mindtree on Friday, May 6, announced a merger after separate meetings by the board of the software units, managed by the Mumbai-based engineering firm L&T. The much-anticipated merger will create  “an efficient and scaled-up IT services provider” with a valuation of over $3.5 billion, the Larsen and Toubro Infotech (LTI) said in a press release on the day. The name of the combined entity will be “LTIMindtree”, the company further said on the day. The announcement has been anticipated for the past few days.

“The Boards of Directors of LTI and Mindtree at their respective meetings held today approved a composite scheme of amalgamation of both these independently listed IT services companies under the Larsen & Toubro Group. The proposed integration will see LTI and Mindtree join strengths to create an efficient and scaled-up IT services provider exceeding $3.5 Bn,” the press released, shared on the website of BSE, said today.

The transaction regarding the LTI and Mindtree merger is subject to shareholder and regulatory approvals, LTI has said. Upon the merger coming into effect, all shareholders of Mindtree will be issued shares of LTI at the ratio of 73 shares of LTI for every 100 shares of Mindtree. “The new shares of LTI so issued will be traded on the NSE and BSE. Larsen & Toubro Limited will hold 68.73 per cent of LTI after the merger,” said L&T Infotech in the press release.

For now, the companies will continue to function independently. A steering committee will be constituted to oversee the transition till the merger process is complete. The name of the combined entity will be “LTIMindtree” leveraging the advantages of both the brands and creating value for all the stakeholders, LTI has said.

“Both LTI and Mindtree have delivered market leading financial performance and created value for shareholders. Given that recent industry shifts (e.g., prominence of large deals, preference for end-to-end offerings) are benefitting at-scale players, the two companies have decided that the time is appropriate to combine the strengths of both organisations to better serve the customers,” the press release by LTI noted.

Speaking about the merger, LTI chairman AM Naik said, “This merger represents our continued commitment to grow the IT services business in line with our strategic vision. The highly complementary businesses of LTI and Mindtree will make this integration a ‘win-win’ proposition for our customers, investors, shareholders, and employees.”

“We are confident that the proposed merger will help us build on the combined strengths of both these organizations to unlock synergies through scale, cross-vertical expertise, and talent pool. This will help us emerge as a partner of choice for large-scale tech transformations and create a distinctive employee value proposition,” said LTI vice chairman SN Subrahmanyan.

Significant scale benefits are anticipated through LTI and Mindtree’s complementary strengths resulting in a stronger portfolio of offerings across verticals, the company said, explaining the gains from the move. “Enhanced customer engagement and delivery model through industrialization of delivery and streamlined value-enabling processes is expected to result in improvement in large deal capabilities. These opportunities will create a more distinctive employee value proposition and stronger partnerships with ecosystem players,” it added.

Read all the Latest News , Breaking News and IPL 2022 Live Updates here.

Be the first to comment

Leave a Reply