Larsen & Toubro Infotech (L&T Infotech - LTI)

Founded in 1996, LTI is a global IT services company and a subsidiary of Larsen & Toubro, a major Indian engineering and construction conglomerate. LTI specializes in consulting, digital core solutions, and IT infrastructure services.

Mindtree

Established in 1999, Mindtree is another Indian IT services company known for its expertise in digital transformation, enterprise application services, and cloud solutions.

Reasons For The Merger

The merger between LTI and Mindtree, finalized in November 2022, was driven by several strategic objectives:

• Synergy and Growth: Combining the strengths of both companies aimed to create a more robust IT services player with a wider range of offerings and a larger client base. This would enable them to compete more effectively in the global market.

• Enhanced Expertise: The merger brought together complementary skillsets, allowing the merged entity (LTIMindtree) to offer a more comprehensive suite of solutions across various industry verticals.

• Economies of Scale: By combining resources and infrastructure, LTIMindtree could potentially achieve cost efficiencies and improve operational margins.

• Increased Market Share: The merger created India's fifth-largest IT services company by market capitalization, strengthening their position in the domestic market.

Financials before merger

Financial Position Post-Merger (As per 31st March 2023)

Combined revenue: USD 4.2 billion

Combined PAT: USD 588 million

Combined workforce: Over 84,000 associates

Share division ratio:

Mindtree Shareholders: Received 73 shares of LTIMindtree (the merged entity) for every 100 shares held in Mindtree.

L&T Infotech Shareholders: Maintained their existing shares in LTI, which were automatically converted to shares in LTIMindtree during the merger process. They did not receive any additional shares.

DISCLAIMER: This blog is solely for educational purposes and not to offer any investment advice. Please do your own research or consult a financial advisor before making any investment decisions.