Larsen & Toubro (L&T) Infotech (LTI) is merging with Mindtree to create LTIMindtree -- a $3.5 billion IT consulting, services and software giant, the companies have disclosed following off-and-on rumors about the deal.
This is technology M&A deal number 452 that ChannelE2E has covered so far in 2022. See more than 1,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.
LTI and Mindtree: Before and After the M&A Deal
LTI's parent -- Larsen & Toubro -- has owned Mindtree since 2019. According to Blooomberg, key financial details to know before the deal was announced included:
- Larsen & Toubro holds about a 61% stake in Mindtree, and 75% of L&T Infotech (LTI).
- Mindtree has a market value of $8.3 billion, and L&T Infotech has a market capitalization of $13.6 billion.
Near-term, the companies will continue to function independently. A Steering Committee will be formed to oversee the transition until the merger process is completed. Once the M&A deal is completed:
- Mindtree CEO Debashis Chatterjee will lead the combined entity.
- 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.
LTI and Mindtree Merger: Executive Perspectives
In a prepared statement about the deal, LTI Chairman A. M. Naik said:
“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.”
Added LTI Vice Chairman S. N. Subrahmanyan:
“We are confident that the proposed merger will help us build on the combined strengths of both these organizations to unlock synergies through scale, cross-vertical expertise, and talent pool. This will help us emerge as a partner of choice for large-scale tech transformations and create a distinctive employee value proposition.”
LTIMindtree's IT Services Rivals
Once the merger is completed, LTIMindtree could potentially scale to compete more aggressively against TCS, Infosys, HCL, Wipro and Tech Mahindra, among other big India-based IT services firms, ChannelE2E believes.
This blog originally published in April 2022. Updated May 9, 2022, to reflect the deal's official announcement.