By IANS
Mumbai : Top engineering and construction firm Larsen & Toubro Ltd (L&T) Thursday said that the company had signed a deal with Malaysia-based Tamco Corporate Holdings Bhd to acquire Tamco’s de-merged switchgear business for an undisclosed sum.
The company said that it would buy Tamco’s three switchgear manufacturing subsidiaries in China, Australia and Indonesia that include Shanghai-based Tamco Shanghai Switchgear Co Ltd, Tamco Electrical Industries Australia Pty Ptd and PT Tamco Indonesia.
The deal was singed in Kuala Lumpur by Tamco’s chairman Dato Abdul Latif bin Abdullah and deputy chairman Dato Siew Ka Wei and L&T’s president and member of board R.N. Mukhija.
Speaking on the buyout, Mukhija said: “This is a significant move forward in L&T’s plans of reinforcing its position as a major player in the switchgear business. Tamco has a strong presence in the medium voltage (MV) category.”
“With this acquisition, L&T will be able to offer a comprehensive range of MV switchgear in India and the international market. This deal meets our requirements on both fronts of technology acquisition and market access. L&T’s process improvement initiatives will help achieve cost efficiency and contribute to synergy benefits,” he added.
Tamco is a major player in MV switchgear in Malaysia. The Middle East and Malaysia together contribute to over 50 percent of its revenue.
With this acquisition, L&T will have access to fast growing MV switchgear markets like the Middle East.
“This synergistic acquisition will enhance L&T’s capability in both LV (low voltage) and MV categories and will allow it to offer turnkey solutions to customers,” the company said.
“The domestic MV switchgear market is currently growing at 15 percent per annum. This growth rate is expected to increase further in the next five years on account of initiatives like the Electricity Bill of 2003 and power sector reforms,” it said.
The national focus on the fast-tracked incremental power generation programme will provide a strong impetus to spur the demand for MV switchgear, leading to an increase in the growth rate of these products.