This week in IT: India’s first hostile takeover of Mindtree by L&T is complete

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26 Aug, 2025 12:21

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India’s first ever hostile takeover of Mindtree by L&T has been completed. After Mindtree’s shares were oversubscribed in the recently concluded open offer, L&T is now the single largest shareholder.

L&T launched the open offer for Mindtree’s 31 percent shares from June 17 to June 28, 2019. According to reports, L&T has gained over 60 percent share in Mindree and closer to its intention to acquire 66.32 percent in the company.

It is unclear whether founder promoters tendered their shares in the open offer. While some reports claimed that founders have decided to sell their shares, others have reported that they have not.

Either way it goes, this takeover will probably go down as a case study in corporate takeovers in India due to the nature of how it panned out.

It all started when the talks between VG Siddhartha and L&T started in February to buy VG Siddhartha and his coffee enterprise’s 20.32 percent shares in Mindtree. The engineering behemoth signed a definite agreement to buy all of Siddartha and his coffee enterprise's shares in March.

However right from the beginning Mindtree founders Rostow Ravanan, Krishnakumar Natarajan, NS Parthasarathy and Subroto Bagchi were against the takeover and terming it "hostile". Bagchi, who was heading Odisha’s Skill India mission then, resigned his position as to join hands with other co-founders in resisting the takeover in March.

Between February and March, Mindtree looked for various ways, which included finding a white knight to buy Siddhartha’s shares and buyback of shares. The founders and their family had put together had only 13.32 percent, which was not enough to fend off any takeovers.

“Mindtree was looking for a white knight and why is L&T not a white knight?” asked an analyst, who does not want to be named. “It is a ‘hostile’ takeover only because owners were not in agreement with L&T,” the analyst added.

That is probably why Mindtree’s argument that two companies are culturally different and analogy of trees and bulldozers did not convince the potential investors, the analyst added. This is hardly surprising given the consolidation we have witnessed in the mid-cap IT space in the recent times.

NIIT Technology was acquired by Baring Private Equity Asia in April 2019. Baring Private Equity Asia already has majority stake in another mid-tier IT firm Hexaware Technologies. The merger of the entities is likely to take place in the future. Blackstone private equity acquired Bengaluru-based IT firm Mphasis in 2016. Apart from these,  major IT firms have stepped by their acquisition strategy and are looking to buy small to mid tech companies to boost their digital portfolio.

We are also seeing similar takeovers in the e-commerce and startup space. For example, Flipkart’s acquisition by retail giant Walmart by the acquisition of a 77 percent stake in May 2018.

Talking about culture misfits, as the merger and acquisition landscape is changing, it will neither help the company’s cause nor benefit the founders. Going forward there will be more cases of founders continuously diluting their stake in the company.