New Delhi, Oct 11: Engineering and construction firm Larsen and Toubro Ltd (L&T) today said it has signed a share sale agreement with Malaysia-based Tamco Corporate Holdings Bhd, to aquire its switchgear business.
The two parties also proposed to enter into three other agreements for acquisition of three of Tamco's switchgear manufacturing subsidiaries - Tamco Shanghai Switchgear Co Ltd in China, Tamco Electrical Industries Australia Pty Ltd in Australia and PT Tamco Indonesia in Indonesia.
Company's President (operation) R N Mukhija said, ''Tamco has a strong presence in the medium voltage (MV) category.
With this acquisition, L&T will be able to offer a comprehensive range of MV switchgear in India and international market.'' He added, ''this deal meets our requirements on both fronts of technology acquisition and market access. L&T's process improvement initiatives will help achieve cost efficiency and contribute to synergy benefits.'' Tamco is a major player in MV Switchgear in Malaysia. The West Asia and Malaysia, together contribute to over 50 per cent of its revenue.
The acquisition will enable L&T to have access to the fast growing MV Switchgear markets like the West Asia and the EPC contractors that have approved use of Tamco's products. This synergistic acquisition will enhance L&T's capability in both LV with MV categories, and will allow it to offer turnkey solutions to customers.
The domestic MV Switchgear market is currently growing at 15 per cent per annum. This growth rate is expected to increase further in the next five years on account of initiatives like the Electricity Bill of 2003, and power sector reforms.