The boards of directors of Larsen and Toubro Infotech (LTI) and Mindtree at their respective meetings held on Friday approved a composite scheme of amalgamation
of the two listed IT services companies under the Larsen & Toubro Group and create a combined entity with a revenue of more than $3.5 billion.
Larsen and Toubro had acquired control of Mindtree in 2019 and speculation has been rife on when the two companies will be united.
Transaction contours
As part of the proposed transaction, Mindtree with market cap of Rs 57,800 crore will merge into LTI with market cap of Rs 83,600 crore. Subsidiaries and associates of Mindtree will become subsidiaries and associates of LTI.
The transaction process for the amalgamated entity — LTI Mindtree Limited — is expected to be closed within 9-12 months on the basis of shareholder and regulatory approvals including from stock exchanges and NCLT. Till the scheme receives clearance, both companies will
continue to operate independently. A steering committee will be constituted to oversee the transition till the merger process is complete.
Shareholders of Mindtree as on record date will receive 73 shares of LTI (face value of Rs 1 each) for 100 shares of Mindtree (face value of Rs 10 each). The new shares of LTI issued will be traded on both NSE and BSE. Promoter Larsen & Toubro Limited will own around 68.73 per cent stake in the combined entity.
The companies currently have a combined headcount of 81,719 and even with high attrition rates across the industry, the management remains optimistic about headcount.
L&T group chairman A.M. Naik also announced a change in the leadership with Mindtree MD and CEO Debashis Chatterjee expected to head the combined entity.
“We had two CEOs and Debashis Chatterjee will be heading the combined entity.
Sanjay Jalona, CEO and MD (of LTI) has decided to move on from the organisation for personal reasons,” Naik said.
S. N. Subrahmanyan, vice- chairman, LTI, said, “We are confident that the proposed merger will help us build on the combined strengths of both these organizations to unlock synergies.”
