L&T Infotech-Mindtree merger likely by year-end

The merger process of Mindtree and Larsen & Toubro Infotech, two software units managed by a Mumbai-based engineering conglomerate, is expected to be completed by December this year, during which time both companies will continue to operate independently.

The two Larsen & Toubro subsidiaries had announced a mega merger last month to create an efficient and scaled IT service provider, with combined revenues of more than $3.5 billion.

Mindtree shareholders will be issued 73 L&T Infotech shares for every 100 shares held, according to a previously filed exchange application by the companies. Larsen & Toubro Ltd, the parent company, will own 68.7% of the combined entity after the merger.

The name of the combined entity will be “LTIMindtree,” the companies had said in a statement.

“We hope the merger will be completed in the next two quarters… It is still undergoing regulatory approvals. Three to four agencies are involved in the process,” L&T Infotech Chief Operating Officer Nachiket Deshpande told the news agency. PTIA

Larsen & Toubro acquired a majority stake in Bengaluru-based Mindtree in 2019.

Deshpande said he expects demand for IT services to remain strong over the next three to five years and supply-side constraints to ease within a few quarters.

“Once the transformation in an organization starts, it cannot be stopped halfway. Despite fears of a recession, most of the customers we spoke to said they are unlikely to cut IT spending,” he said.

The senior official said L&T Infotech will increase its footprint in multiple cities and is evaluating several locations for setting up new offices.

“We believe that we should now bring work to people rather than take people to work,” Deshpande said.

L&T Infotech opened its first center in Kolkata on Friday and said it plans to hire 4,000-5,000 employees in the eastern region over the next two to three years.

Larsen & Toubro reported a 10 percent growth in consolidated net profit on . last month 3,620.69 crore for the quarter ended March 2022.

The company posted a consolidated net profit of 3,292.81 crore in the same period a year ago.

The consolidated result rose to 53,366.26 crore from 49,116.16 crore in the period from a year ago.

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