Schneider Electric to take full ownership of India unit for €5.5 billion

Schneider Electric has announced that it has signed an agreement to acquire the remaining 35% stake of Schneider Electric India Private Limited (SEIPL) from Temasek to reach full ownership.

Under the terms of the transaction, Schneider Electric will acquire the remaining 35% of SEIPL for an all-cash consideration of €5.5 billion, Schneider said in a media release.  

The transaction is subject to customary closing conditions, including the receipt of required regulatory approvals such as from the Competition Commission of India, and is expected to close in the coming quarters.

This transaction represents the logical next step in Schneider Electric’s strategic investment focus on India as both an attractive domestic growth market and one of the key hubs in its multi-hub strategy, with an R&D and supply chain platform for the region, other emerging markets and beyond. Full ownership of SEIPL will support speed of decision-making for India as a hub, the company said.

In the coming years, Schneider Electric expects double-digit CAGR organic sales growth for SEIPL. The Group also expects to further leverage India as an important R&D and supply-chain hub, particularily for Asia Pacific and other emerging markets, and plans to expand its capacity in India by 2.5x to 3x.

The initial transaction in 2018 entailed partnering with Temasek to jointly acquire the Electrical and Automation business of Larsen and Toubro Limited and to combine it with Schneider Electric India’s Low Voltage and Industrial Automation Products business. Temasek has played an important role both during and after the close of the transaction in August 2020, Schneider said.

“India is one of the key focus markets of Schneider Electric for the years to come and I am very excited by the prospect to capture the full growth potential of this unique opportunity we have in the country and also to leverage our exceptional talents in R&D, Digital and supply-chain in India to support our operations in the region and beyond,” said Olivier Blum, Chief Executive Officer of Schneider Electric.  

“Our partnership with Schneider Electric reflects our belief that partnerships can create long-term value through complementary strengths and a shared vision,” said Chia Song Hwee, Deputy Chief Executive Officer of Temasek. “We have been privileged to journey alongside Schneider Electric India Private Limited and we look forward to seeing them grow as a leading franchise in India.”