FAQs for Customers of Schneider Electric
Schneider Electric in partnership with Temasek has reached an agreement with Larsen & Toubro to combine its E&A business with Schneider Electric’s Low Voltage and Industrial Automation Products business in India
1. What is the deal/ transaction about?
Schneider Electric, partnering with Temasek, has reached an agreement with Larsen & Toubro (L&T) to buy and combine its Electrical and Automation business (L&T E&A) with Schneider Electric India’s Low voltage and Industrial Automation Product business (“Combined Business”) which will be jointly owned by Schneider and Temasek.
2. What does L&T E&A business do?
L&T E&A is a recognized player in the Low Voltage and Industrial Automation business in India led by an experienced management team. It offers low voltage switchgear, electrical systems & equipment, energy management, metering and industrial automation solutions. It benefits from an extensive ecosystem of partners covering more than 260 cities in India. It has an efficient local manufacturing footprint with 5 manufacturing locations in India along with robust local R&D capabilities. The company is also present in the Middle-East and South-East Asia markets. L&T E&A has over 5,000 employees, excluding Marine Switchgear and Servowatch Systems.
For more details, you can refer to the website of E&A http://www.larsentoubro.com/electrical-automation/
3. Are all the products/ businesses of E&A being combined?
E&A business except for Marine Switchgear in India and Servowatch subsidiary in the UK will be combined with Schneider Electric Low Voltage and Industrial Automation Products business in India. Marine Switchgear and Servowatch Systems will continue to be retained and operated by L&T.
4. Which businesses and functions of Schneider Electric are in the scope of the Combined Business?
Partner Projects, Eco Building, Retail FD/WD & Industry BUs of Schneider in India will be the part of the Combined Business.
Process Automation (PA), Energy, IT Division (ITD), Solar, Luminous are not part of the Combined Business.
5. Who is Temasek and what is their role?
- • Temasek is the global investment arm of Singapore State Government with 275 Billion $ of total portfolio with an exposure of ~10 Billion $ (5%) in India.
- • Schneider Electric is partnering with Temasek for the proposed transaction. Both Schneider and Temasek are committed towards investing in India. Schneider Electric with be a majority partner (65%) while Temasek will hold the rest 35%, in the “Combined Business”
6. What is the strategic rationale for Schneider Electric to acquire L&T E&A business?
This combination will create significant synergies and efficiencies by leveraging on the complementary businesses of Schneider and L&T E&A business, including:
- • utilization of L&T E&A’s R&D set up with capability to locally develop products suited for India and other new economies with Schneider’s global technology and best practices;
- • wide range of products and technologically superior solutions to the Indian consumers across portfolios and price points;
- • widespread network of distributors/ channel partners and extensive geographical reach across India, enabling Schneider access to consumers in tier 2 and tier 3 cities and semi-urban and rural areas across India, where Schneider Electric currently has a limited presence;
- • enhanced manufacturing footprint in India which will result in greater domestic production, reduced dependence on imports and increased employment opportunities;
- • developing India as the “fourth” hub for Schneider globally (the other three being US, France and China) to cater to the growing Indian market as well as develop India as the hub for other new and emerging markets, including the Middle East, Africa and South-East Asia;
- • expertise in additional segments within industries, infrastructure and construction; and
- • strong organizational capability of E&A to execute integrated electrical and automation projects with custom engineered solutions. Apart from creating a stronger solution capability in the organization, it will also create strong demand for products of combined business from projects.
7. What is the process now and expected timelines?
- • We are currently at ‘Signing’ stage where both companies have mutually agreed to combine L&T E&A business with Schneider Electric. Subsequently, customary regulatory approvals, including approval from the Competition Commission of India, will be sought and other subsequent processes will be completed before the deal is concluded (“Closing”). The deal is expected to close once regulatory approvals are in place.
- • Until Closing, it is ‘Business as Usual’ and Schneider and L&T will continue to operate independently as they do today without any changes in products, service offerings or deliverables. Respective teams must remain focused on delivering on business commitments, ensuring customer satisfaction and overall operating performance.
8. What key regulatory approvals are required for the transaction?
- • The proposed transaction is subject to customary regulatory and other approvals including the approval of the CCI
- • We are in the process of drafting the merger notification for the proposed transaction to the CCI and will work with CCI to address their queries. We believe that the proposed transaction would be beneficial to the Indian economy and consumers in terms of offering a wider range and quality of technological products/solutions to the Indian consumers and create employment opportunities. Schneider and Temasek are committed to investing in India pursuant to the Make in India proposal and look forward to working with the regulators to address and satisfy their concerns if any.
9. What is the integration strategy and timelines?
Post ‘Closing’, a detailed integration strategy will be devised keeping in mind best interests of customers, employees, partners & all other stakeholders of both companies.
10. What does this transaction mean to Schneider Electric customers?
The proposed transaction will help customers benefit from a combined portfolio of Schneider Electric and E&A business offers price points and segments. Customers in geographies where currently only Schneider or E&A operates will also have access to a large portfolio of combined entity as well as to advanced technology products/solutions offerings.
11. Will there be any impact on my ongoing orders? Will there be any changes made to terms agreed with E&A?
All commitments as based on the agreement will be honoured and the transaction will have no impact on any ongoing order.
12. Will there any change expected in my delivery schedule or execution timelines?
Customers of Schneider and L&T can be rest assured that there will be no impact in meeting commitments with respect to delivery schedules or timelines because of the proposed transaction.
13. What will happen to service obligations of E&A and Schneider?
Customers of both E&A business and Schneider will continue to receive after sales services based on the existing terms of contracts of respective organizations and post-closing, the merged entity will ensure all transferred contractual obligations.
14. Will there be any issues related to availability of products due to this transaction?
We do not anticipate any impact on availability of products of either company due to the proposed transaction
15. Will any significant changes be made to product portfolio of either company? Will any products be discontinued?
There are no immediate plans to make changes to the product portfolio of either company
16. Can I get blokset with L&T components? Can I get L&T panel with Schneider Components?
There are no immediate plans to make changes to the product portfolio of either company. However, in future, Post Closing, we would like to bring more options to our customers to serve their needs better. This will be informed well in advance to all customers
17. Can I start buying L&T products from Schneider Distributor or Vice versa?
- • Until Closing, distributors of both companies will continue to sell current products of respective companies as done currently
- • Post-closing scenario will depend on the integration strategy that will be developed and shared with all customers in due course of time
- • Intent of integration strategy will be to serve our customers better and create more opportunities for partners of both companies by driving synergies which will help the combined business to grow faster, which will only be undertaken Post Closing
18. My installation has both Schneider & L&T products. Who should I get in touch with for after sales services?
Until Closing, both the companies will continue to operate independently and render services for the respective products You can continue to contact the same teams of respective companies as you do today.
19. Who will be responsible for after sales services of ongoing orders?
- • Until Closing it is business as usual and Schneider and L&T will continue to operate independently as they do today without any changes.
- • There is no immediate change expected on service model. You can continue to contact the same people from Schneider as you do today.
20. What will be the impact on product warranties?
All commitments based on the agreement will be honoured and the proposed transaction will have no impact on existing warranties.
21. L&T E&A has training centers for imparting training to my engineers, will it continue?
Yes. There will be no changes.
22. If I have more questions on this who can I ask?
For any specific questions please direct them to the official email id email@example.com