India's L&T Infotech, Mindtree to merge ops to form large-scale IT firm
BENGALURU (Reuters) – Indian IT services company L&T Infotech (LTI) said on Friday it would merge its operations with Mindtree Ltd, forming a large-scale player to take on bigger competitors in the country’s booming IT industry.
“The proposed integration will see L&T Infotech and Mindtree join strengths to create an efficient and scaled-up IT services provider exceeding $3.5 billion,” L&T Infotech said in a statement.
Mindtree shareholders will get 73 shares of LTI for every 100 shares of Mindtree, the statement said, adding the combined entity will be called as LTIMindtree.
Indian conglomerate Larsen & Toubro (L&T) acquired Mindtree in 2019, following a rare hostile bid for a controlling stake, the first such pursuit in India’s software services industry. (reut.rs/36ob6ep)
L&T’s push for scale in the high-growth software industry follows a pandemic-led surge in demand for digitalisation, as global businesses invest billions of dollars in cloud-computing, digital payment infrastructure and cyber security.
“This (merger) will help us emerge as a partner of choice for large-scale tech transformations and create a distinctive
employee value proposition,” S. N. Subrahmanyan, vice-chairman of Mindtree, said in a statement.
Sector giants, including Tata Consultancy Services, Infosys and Wipro, have been securing larger contracts and investing heavily on services like cloud infrastructure and data analytics. India’s tech industry reached over $220 billion in revenue in FY2022.
L&T owns a little over 60% in Mindtree and a 74% stake in L&T Infotech.
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