Singapore state investment firm Temasek is exiting its Indian joint venture with Schneider Electric, seven years after teaming up with the French company to acquire Larsen & Toubro Ltd’s electrical and automation business.
Temasek will sell its entire 35% stake in Schneider Electric India Pvt Ltd to the French electrical equipment maker for €5.5 billion ($6.35 billion) in cash, according to a press release. The French firm already owns 65% of the JV. The transaction is subject to the Competition Commission of India’s approval.
Temasek and Schneider Electric joined hands in 2018 to acquire L&T’s electrical and automation business, L&T Switchgear, which was rebranded to Lauritz Knudsen after the merger with Schneider Electric’s low voltage and industrial automation products business. At the time of the deal’s closure in 2020, the entity was valued at $2.1 billion, or about €1.75 billion euros, where Temasek invested about €530 million and Schneider Electric pumped in about €1.57 billion.
It is not clear whether Temasek made any additional investments in the JV. Assuming it didn’t, the exit would generate an over 10x multiple on invested capital (MOIC) for Temasek, as per VCCircle estimates.
As for Schneider Electric, the deal will help it to attain full ownership of the Indian arm’s operations. “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,” the French firm said in a statement.
It also said that the full ownership of the India subsidiary will support speed of decision-making for India as a hub. India is now the third-largest market for Schneider Electric, and the company counts India among its four hubs.
“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,” Schneider Electric’s chief executive Olivier Blum said.
In 2024, Schneider Electric India clocked statutory revenue of €1.8 billion while its total sales in India were €2.5 billion across subsidiaries.