l&t infotech Mindtree Merger : – According to intelligence sources, Larsen Toubro Limited is evaluating a merger between its two publicly traded software firms. Sorce Blumberg
As both these companies work under the control of Toubro Infotech Ltd group and want to operate on a large scale to stay competitive with the global digital giants.
Both Mindtree Limited and Larsen & Toubro Infotech Limited are governed by the boards of software entities, a Mumbai-based engineering firm.
Both entities may consider the share swap ratio for a merger as early as next week, the report quoted sources as saying, as searched by Bloomberg.
Larsen acquired control of Mindtree in 2019. The Larsen Group holds approximately 61% stake in the company, and the market value of this stake is $8.3 billion.
L&T Infotech holds about 74% stake, with a market value of $13.6 billion, all information gathered by Bloomberg which is published.
It is believed that the business of both Mindtree Limited and Larsen & Toubro Infotech Limited is similar and customers overlap as well, so a merger of both can give better results.
This news of the merger of both the companies can prove to be true and it can also be proved wrong because discussions are going on on this merger which may be possible and may also be canceled.
Mindtree reported higher than estimated net income of Rs 4.41 billion in the fourth quarter.
The reason for the merger proposal could also be the digitization that came during the time of a Kovid-19 because during this time the businessmen used digitization more and more and the demand for information technology is growing at a fast pace.
Seeing the scope of digitization, the biggest IT companies are expanding into areas like IT outsourcing, cyber security, automation and machine learning.
The news of the merger also affected the stock of both the companies and the shares of both the companies closed with a slight decline. The share of Mindtree saw a decline of 3.5% and the stock of L&T Infotech was down by 2.7%.
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A Bloomberg report said the merger could be announced as early as next week, along with details of the share-swap ratio. However, mid-cap IT services firm Mindtree said in its earnings call that the news is pure rumor and it would not respond to speculation.