L&T buys Malaysian switchgear company

Larsen and Toubro (L&T) today announced the acquisition of the switchgear business of Malaysian company Tamco Corporate Holdings for $108 million(Rs 425 crore).

This will give L&T control of the four switchgear plants of the company in Malaysia, China, Australia and Indonesia. The acquisition of Tamco Switchgear Malaysia, the Malaysian unit of the company, was completed today by L&T. It will complete the acquisitions of Tamco Shanghai Switchgear in China, Tamco Electrical Industries Australia and PT Tamco Indonesia over the next four to six months.

R N Mukhija, president "� operations and a member of the L&T board, spoke to Business Standard from Kuala Lumpur, "This is a significant move forward in the company's plans of reinforcing its position as a major player in the switchgear business. With this acquisition, L&T will be able to offer a comprehensive range of medium voltage (MV) switchgear in India and the international market. This deal meets our requirements of technology acquisition and market access." Tamco posted revenues of $102 million last year.

He said the acquisition would boost the company's electrical and electronic business (which includes the switchgear business) to Rs 4,000 crore in two years from its last year's revenue of Rs 2,500 crore. Of this, the acquisition is expected to generate Rs 800 crore.

L&T, the second-best performing stock on the benchmark Sensex this year, is expanding its business locally. This is the first overseas acquisition by the company which has been pulling out of its non-core area of businesses for quite some time.

The L&T stock today closed at Rs 3,486.65 on the BSE, 3.40 per cent higher than its yesterday's close.

L&T started negotiations with Tamco when the Malaysian company demerged its business unit recently.