BY Fraser Tennant
In a combination that creates an Indian tech giant, global multinational information technology services and consulting companies L&T Infotech (LTI) and Mindtree are to merge in a transaction valued at $3.5bn.
The two companies have decided that, in light of recent industry shifts, such as the prominence of large deals and the preference for end-to-end offerings, the time is appropriate to combine the strengths of both organisations to better serve customers.
Under the terms of the merger agreement, 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 National Stock Exchange of India and the Bombay Stock Exchange.
Significant scale benefits are anticipated through LTI and Mindtree’s complementary strengths, resulting in a stronger portfolio of offerings across verticals. Enhanced customer engagement and delivery model through industrialisation of delivery and streamlined value-enabling processes is expected to result in improvement in large deal capabilities.
These opportunities will create a more distinctive employee value proposition and stronger partnerships with ecosystem players.
The name of the combined entity will be ‘LTIMindtree’ and will leverage the advantages of both the brands and create value for stakeholders.
“This merger represents our continued commitment to grow the IT services business in line with our strategic vision,” said A. M. Naik, chair of Mindtree. “The highly complementary businesses of Mindtree and LTI will make this integration a ‘win-win’ proposition for our customers, investors, shareholders and employees.”
The transaction is subject to shareholder and regulatory approvals.
“We are confident that the proposed merger will help us build on the combined strengths of both these organisations to unlock synergies through scale, cross-vertical expertise and talent pool,” said S. N. Subrahmanyan, vice chair of LTI. “This will help us emerge as a partner of choice for large-scale tech transformations and create a distinctive employee value proposition.”
Until the merger process is complete, for the moment, both companies will continue to function independently while a steering committee oversees the transition.
News: India's L&T Infotech, Mindtree merge to create $18 billion tech company