Larsen & Toubro Group (L&T) will merge its two independently listed IT services companies — Mindtree and Larsen and Toubro lnfotech (LTI) to create a large-scale IT services player in India with annual revenue of over $3.5 billion.

The boards of directors of the two Indian IT firms at their respective meetings gave their nod to a composite scheme of amalgamation.

According to the parties, considering that recent shifts in the industry are benefitting at-scale players, the two firms have decided that the time is right to merge the strengths of both organizations to better cater to the customers.

A. M. Naik — Chairman of Larsen & Toubro said: “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.”

After the scheme gets effective, Mindtree’s shareholders will be issued Larsen and Toubro lnfotech’s shares at the ratio of 73 shares of LTI for every 100 shares of Mindtree.

The new shares of Larsen and Toubro lnfotech so issued will be listed on the NSE and BSE.

Larsen & Toubro will have a stake of 68.73% of Larsen and Toubro lnfotech following the merger.

The name of the combined firm, post-merger, will be LTIMindtree to leverage the advantages of the two brands.

S. N. Subrahmanyan — CEO of Larsen and Toubro said: “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.”

The merger is contingent on shareholder and regulatory approvals.

  A M Naik, India, Larsen & Toubro, Larsen and Toubro, Larsen and Toubro lnfotech, Mindtree, S. N. Subrahmanyan