The Boards of Directors of LTI (L&T Infotech) and Mindtree at their respective meetings held on Friday, May 6 approved a merger of both the independently listed IT services companies under the Larsen & Toubro Group. The proposed integration will see LTI and Mindtree join to create a scaled-up IT services provider exceeding $3.5 billion. The transaction is subject to shareholder and regulatory approvals.
“Given that recent industry shifts (e.g., prominence of large deals, preference for end-to-end offerings) are benefitting at-scale players, the two companies have decided that the time is appropriate to combine the strengths of both organizations to better serve the customers,” the companies said in a statement.
Upon the scheme becoming effective, all shareholders of Mindtree will be issued shares of LTI at the ratio of 73 shares of LTI for every 100 shares of Mindtree. The new shares of LTI so issued will be traded on the NSE and BSE. Larsen & Toubro Limited will hold 68.73 % of LTI after the merger.
For now, the companies will continue to function independently. A Steering Committee will be constituted to oversee the transition till the merger process is complete. The name of the combined entity will be “LTIMindtree”.
“This merger represents our continued commitment to grow the IT services business in line with our strategic vision. The highly complementary businesses of LTI and Mindtree will make this integration a ‘win-win’ proposition for our customers, investors, shareholders, and employees,” said AM Naik, Chairman, LTI.
In June 2019, Larsen and Toubro had bought 51.8% of shares in Mindtree in what was termed as India’s first major hostile takeover, thereby gaining majority control over the Bengaluru-based IT company. Under the open offer, 73.9% of public shareholders had sold their shares to L&T at Rs 980 per share.