larsen: Larsen weighs merging tech arms into $22 billion firm, sources say – Times of India

NEW DELHI: Larsen & Toubro (L&T) is weighing a merger between two of its publicly traded software program companies, in accordance with folks accustomed to the matter, because the conglomerate seeks scale to compete with international digital giants.
The boards of Mindtree and Larsen & Toubro Infotech, two software program items managed by the Mumbai-based engineering agency, may contemplate share swap ratios for the merger as early as subsequent week, one of many folks mentioned, asking to not be recognized as the knowledge will not be public.
Larsen acquired management of Mindtree in 2019. The conglomerate holds a few 61% stake within the firm, which has a market worth of $8.3 billion, and has round 74% of L&T Infotech, which has a market capitalization of $13.6 billion, information compiled by Bloomberg present.
The 2 corporations have minimal overlap in companies or shoppers, and a tie-up would give them higher pricing energy and decrease prices, one of many folks mentioned.
Deliberations across the merger are ongoing and the plan may very well be delayed or collapse, the folks mentioned. A consultant for Larsen mentioned the corporate declined to touch upon hypothesis. Stories concerning the merger are speculative, Mindtree and L&T Infotech instructed the inventory change.
Mindtree on Monday reported fourth-quarter web revenue of Rs 473 crore ($62 million), larger than the Rs 441 crore estimate in a Bloomberg survey. L&T Infotech is scheduled to report earnings Tuesday.
The proposed merger comes as software program corporations are seeing surging demand from companies embracing the digitization that accelerated throughout Covid-19. Massive IT outsourcing companies are additionally increasing into areas similar to cybersecurity, automation and machine-learning assist, transferring past lower-margin conventional back-room companies.
Mindtree closed down 3.5% in Mumbai whereas L&T Infotech was 2.7% decrease.

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