At their respective meetings on Friday, the Boards of Directors of Mindtree and LTI agreed on a composite proposal to merge both of these independently listed IT services firms into the Larsen & Toubro Group. Mindtree and LTI will combine their strengths to form a highly efficient and scaled-up IT services business worth more than $3.5 billion. Shareholder and regulatory approvals are required for the acquisition.
Both Mindtree and LTI have produced market-leading financial results and built shareholder value. Given recent industry developments that favor at-scale players (e.g., the prominence of large agreements, and the preference for end-to-end products), the two companies have agreed that now is the right time to combine their expertise to better serve their clients.
Mindtree and LTI’s complementary competencies are expected to result in a larger range of offerings across verticals, resulting in significant scale benefits. Large deal capabilities are projected to improve as a result of improved customer interaction and delivery model through the industrialization of delivery and optimized value-enabling processes. These possibilities will result in a more distinct employee value offer and better ecosystem collaborations.
“This merger represents our continued commitment to grow the IT services business in line with our strategic vision. The highly complementary businesses of Mindtree and LTI will make this integration a ‘win-win’ proposition for our customers, investors, shareholders, and employees,”Speaking about the merger, A. M. Naik, Chairman, Mindtree/LTI, said.
When the programme goes into operation, all Mindtree shareholders will be issued 73 LTI shares for every 100 Mindtree shares. LTI’s newly issued shares will be traded on the NSE and BSE. After the transaction, Larsen & Toubro Limited will own 68.73 percent of LTI.
“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,”Speaking about the merger, S. N. Subrahmanyan, Vice Chairman, Mindtree/LTI, said.
For the time being, the businesses will operate independently. A Transition Steering Committee will be formed to supervise the transition until the merger is completed. The combined firm will be known as “LTIMindtree,” combining the strengths of both brands and delivering value for all stakeholders.
Contact us with your feedback and suggestions.