Mindtree, LTI announce merger

The proposed integration will see Mindtree and Larsen & Toubro Infotech (LTI) join strengths to create an efficient and scaled up IT services provider exceeding $3.5 billion.

The boards of Mindtree and LTI at their respective meetings held today approved a composite scheme of amalgamation of both these independently listed IT services companies under the Larsen & Toubro Group.

Upon the scheme becoming effective, all shareholders of Mindtree will be issued shares of LTI at the ratio of 73 shares of LTI for every 100 shares of Mindtree. The new shares of LTI so issued will be traded on the NSE and BSE.

Larsen & Toubro will hold 68.73% of LTI after the merger. The transaction is subject to shareholder and regulatory approvals.

For now, the companies will continue to function independently. A Steering Committee will be constituted to oversee the transition till the merger process is complete. The name of the combined entity will be "LTIMindtree" leveraging the advantages of both the brands and creating value for all the stakeholders.

Given that recent industry shifts (e.g., prominence of large deals, preference for end-to-end offerings) are benefiting at-scale players, both Mindtree and LTI have decided that the time is appropriate to combine the strengths of both organisations to better serve the customers.

Significant scale benefits are anticipated through Mindtree and LTI's complementary strengths resulting in a stronger portfolio of offerings across verticals. Enhanced customer engagement and delivery model through industrialization of delivery and streamlined value-enabling processes is expected to result in improvement in large deal capabilities. These opportunities will create a more distinctive employee value proposition and stronger partnerships with ecosystem players, both the firms said in a combined statement.

A. M. Naik, chairman, Mindtree, said: "This merger represents our continued commitment to grow the IT services business in line with our strategic vision. The highly complementary businesses of Mindtree and LTI will make this integration a 'win-win' proposition for our customers, investors, shareholders, and employees."

S. N. Subrahmanyan, vice chairman, Mindtree, said: "We are confident that the proposed merger will help us build on the combined strengths of both these organizations 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."

Mindtree is a global technology consulting and services company that enables enterprises across industries to drive superior competitive advantage, customer experiences and business outcomes by harnessing digital and cloud technologies.

LTI is a global technology consulting and digital solutions company helping more than 475 clients succeed in a converging world. With operations in 33 countries, we go the extra mile to assist our clients and accelerate their digital transformation journeys.

Meanwhile, Sanjay Jalona has resigned as chief executive officer & managing director of LTI due to personal reasons. The board noted and accepted the resignation of Sanjay Jalona. His last working day will be decided mutually.

Shares of Mindtree fell 3.88% to Rs 3374.65 and shares of LTI fell 3.64% to Rs 4593.10 on the BSE.

Powered by Capital Market - Live News