Mindtree’s shareholders will be issued LTI’s shares at the ratio of 73 shares of LTI for every 100 Mindtree shares and the combined company will operate as LTIMindtree in which Indian conglomerate Larsen & Toubro will hold a stake of 68.7%
India-based Larsen & Toubro Infotech (LTI) and Mindtree, which are both publicly-listed subsidiaries of Larsen & Toubro (L&T), have agreed to merge to create a scaled-up IT services provider with annual revenues of over $3.5bn.
The boards of directors of LTI and Mindtree approved a composite scheme of amalgamation at their respective meetings.
Established in 1997, LTI is a technology consulting and digital solutions firm with operations across 33 countries.
Mindtree, which was founded in 1999, is a digital transformation partner. In 2019, Larsen & Toubro took a controlling stake of around 61% in the company.
According to LTI, recent shifts in the industry are helping at-scale players. For this reason, the two firms have determined that the time is apt for combining their respective strengths to better serve the customers.
LTI and Mindtree chairman AM 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.”
Once the scheme becomes effective, Mindtree’s shareholders will be issued LTI’s shares at the ratio of 73 shares of LTI for every 100 Mindtree shares.
The issued new shares of LTI will be listed on the National Stock Exchange of India (NSE) and BSE in India. Larsen & Toubro will hold a stake of 68.73 % in the enlarged LTI following the merger.
The combined entity will operate as LTIMindtree to leverage the advantages of the two merging brands and generate value for all the stakeholders, said LTI.
LTI and Mindtree vice chairman SN Subrahmanyan said: “We are confident that the proposed merger will help us build on the combined strengths of both these organisations 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 closing of the deal is contingent on shareholder and regulatory approvals.