Schneider Electric SE and Eaton Corp becomes the top contenders to bid for acquisition of Larsen Turbo electric and automation division for Rs 15,000-17,000 crore.
Schneider and Temasek have formed an association for the acquisition process of LT division but Eaton may or may not team up with any sponsor.
No other potential investor has shown interest in this buyout like these two. Many investors participated in this acquisition process like Hitachi, ABB, Siemens AG, Honeywell, Swedish- Swiss multinational and few other global financials.
Bids are not open yet but Schneider is keen to acquire this division from LT with an offer of Rs 17,000 crore.
Analysts Aditya Bhatia, Pratik Rangnekar and Veenit Prasad from Investec said in company report that, In FY17, LT monetized its stake in its two key IT subs. This, together with the divestment of General Insurance business, helped the company to completely fund its investments in Nabha Power/ Hyderabad Metro in FY17. Even going forward, we anticipate investments to be limited to development businesses and console CapEx to moderate to Rs30bn annually vs Rs 80bn over FY12-16.