Infrastructure and engineering major Larsen & Toubro (L&T) said on Tuesday it is divesting its electric and automation (E&A) business to French automation giant Schneider Electric for ₹14,000 crore. Schneider will acquire it in partnership with Singapore’s sovereign fund Temasek.

The deal was in the making for nearly years years as part of L&T’s decision to exit non-core businesses. A number of suitors including ABB, Honeywell, Siemens and Hitachi had looked at L&T’s E&A business.

The E&A business will be combined with Schneider Electric India’s Low Voltage and Industrial Automation Product business, where Temasek will hold 35 per cent, Schneider Electric said, adding that with this transaction, India will become its third largest market in terms of revenues.

While the definitive agreement between L&T and Schneider Electric is subject to regulatory approvals, it may take another 12-18 months to finalise the transaction, sources close to the development said.

L&T’s E&A business reported net revenues of ₹5,038 crore in FY17. It caters to various segments from industries, utilities and infrastructure to building and agriculture, providing a range of switchgear, electrical systems, automation solutions, energy management systems and metering solutions. It has manufacturing facilities in India, Saudi Arabia, the UAE, Kuwait, Malaysia, Indonesia, Australia and the UK.

The transaction includes all the current business segments of E&A except Marine Switchgear and Servowatch Systems, which L&T will retain. Both businesses together currently represent around 2-3 per cent of E&A revenues. Bank of America Merrill Lynch and Citi were the buy side advisers to Schneider.

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