Schneider Electric To Buy Out Temasek's Stake In India JV For Rs 55,465 Crore

Schneider Electric will buy out Singaporean investment firm Temasek's remaining 35% stake in their India joint venture, Schneider Electric India Pvt Ltd (SEIPL) for 5.5 billion euros or approximately Rs 55,465 crore.

The company announced on Wednesday an agreement to acquire the stake to reach full ownership in SEIPL for an all-cash consideration. The deal will require regulatory approval from the Competition Commission of India and is expected to close in the coming quarters.

"Full ownership of the India operations will support the speed of decision-making for its third-largest market," Schneider Electric said in a statement.

The company sees India as both an attractive domestic growth market and one of the key hubs in its multi-hub strategy, with an R&D and supply chain platform for the region, other emerging markets and beyond.

In May 2018, the French industrial technology giant partnered with Temasek to jointly acquire the Electrical and Automation business of Larsen and Toubro Ltd. and to combine it with Schneider Electric India’s Low Voltage and Industrial Automation Products business.

Temasek played an important role both during and after the close of the transaction in August 2020. L&T E&A was acquired at an enterprise value of Rs 14,000 crore. While Schneider invested Rs 3,425 crore in cash, Temasek contributed Rs 5,075 crore in cash. The joint venture also financed the deal via debt of Rs 5,500 crore.

Schneider Electric expects double-digit annual organic sales growth for SEIPL in the coming years. "The group also expects to further leverage India as an important R&D and supply-chain hub, particularly for Asia Pacific and other emerging markets, and plans to expand its capacity in India by 2.5x to 3x," the statement said.

As per the company, SEIPL had statutory revenues of 1.8 billion euro (including export sales) in 2024 and total domestic sales of 2.5 billion euro across subsidiaries.

Shares of Schneider Electric Infrastructure Ltd. traded 4.4% higher at Rs 950 apiece on the NSE after the news. The company is part of the French multinational group.