In May last year, Schneider Electric, together with Singapore's state investment firm Temasek Holdings, had announced an all-cash buyout of L&T's electrical and automation business.
Schneider Electric expects to complete the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020, its India head Anil Chaudhry said on September 11.
In May last year, Schneider Electric, a global player in energy management and automation, together with Singapore's state investment firm Temasek Holdings had announced an all-cash buyout of L&T's electrical and automation business.
"We expect the deal to close in the next few months... maybe end of the year or early next year," said Chaudhry, zone president and managing director of Schneider Electric India Pvt Ltd.
Schneider, he said, has a "very strong commitment" to India which it sees as the future growth engine of the world.
Also, the country's vision to become a developed nation from a developing one now would need massive infrastructure building and Schneider Electric can "play a strong role," he said.
The deal has already got approval from the anti-monopolistic body Competition Commission of India (CCI).
The acquisition will catapult India to the number three country in Schneider group globally in terms of business from the current fifth or sixth position, he said.
"More importantly, with this India will be a very strong fourth engineering and manufacturing hub for the group. Today we have three hubs - one in France, one in China and one in the US. With this (deal) we will be setting up the fourth hub in India," he added.
Chaudhry said Schneider Electric and L&T's electrical business have a strong complementary role as it would widen the offering for customers.
"L&T's electrical automation business has a very strong team, a very strong engineering capability, and R&D capability. This can also contribute to Schneider Electric's growth in new and developing economies especially in the Middle East, Africa and East Asia where we can export more," he said.
Schneider Electric has formed a consortium with Temasek Holdings for the transaction. Under the proposed deal, both partners will make fresh investments in Schneider's wholly-owned subsidiary, Schneider India, which in turn will buy out L&T Electrical & Automation.
After the transaction is completed, Schneider Electric will have a 65 percent stake in the company, while the remainder will be held by Temasek.
Chaudhry was speaking at the launch of EcoStruxure Power & Process (EP&P) -- an internet of things (IoT) solution created in partnership with Microsoft for energy management and automation which will drive efficiencies up while reducing operating and capital expenditure by 20-30 percent.
He said against the typical model of power and process management systems operating as separate silos, Schneider's latest offering will help companies in oil, gas, and petrochemical sector plan better and solve critical engineering and operating challenges.
"This can result in better returns on capital employed (ROCE), with a 20 percent reduction in capex, 15 percent reduction in downtime, and 3 percent growth in profitability," he said.
By leveraging EcoStruxure IoT-enabled system architecture and platform, customers can connect assets that are the centre of their projects with assets that are at the centre of their operations across the full lifecycle of their plants, including their supply chains.By offering both tangible IoT solutions that are available today as well as leading-edge innovation to address future needs, customers will benefit from the blend of domain/subject matter expertise from Schneider Electric and industry-leading cloud technology from Microsoft.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.