Schneider Electric and Temasek set to conclude India joint venture, selling it off for approximately $6.35 billion.
Singapore-based Temasek has announced the sale of its 35% stake in Schneider Electric India Pvt Ltd to Schneider Electric for €5.5 billion ($6.35 billion) in cash. The deal, if approved by the Competition Commission of India, will give Schneider Electric full ownership of the Indian arm's operations, making it the third-largest market for the French multinational.
The decision by Temasek to sell its stake is primarily financial and strategic. By exiting, Temasek is realizing a substantial return on its investment, which is consistent with its strategy as a state investment firm to recycle capital from mature assets. The sale allows Temasek to capitalize on India’s strong economic growth, cashing out at a significant valuation after initially partnering with Schneider Electric in 2018 to acquire and combine Larsen & Toubro's electrical and automation business with Schneider’s India operations.
For Schneider Electric, acquiring Temasek’s stake and gaining full ownership provides complete operational control in an important and fast-growing market. It enables more streamlined decision-making and the ability to fully integrate India’s business into its global operations, supporting future growth and investment in the region. The strategic importance of this move for Schneider Electric’s long-term expansion is reinforced by India being its third-largest market.
Schneider Electric currently owns 65% of the joint venture, and the deal will allow the company to attain full ownership. The transaction is expected to generate an over 10x multiple on invested capital (MOIC) for Temasek, reflecting the success of the joint venture over the past few years.
In 2024, Schneider Electric India clocked statutory revenue of €1.8 billion, and its total sales in India were €2.5 billion across subsidiaries. The entity, after the merger, was valued at $2.1 billion at the time of the deal's closure in 2020.
Schneider Electric’s CEO, Olivier Blum, has expressed excitement about the potential growth in India. The acquisition will provide Schneider Electric with the opportunity to further expand its footprint in the country, leveraging its strong position in the electrical equipment and automation sectors.
The deal is subject to the approval of the Competition Commission of India, and if approved, it is expected to close in the second half of 2023.
- This financial move by Temasek indicates a strategic decision to capitalize on India's strong economic growth by exiting its investment in Schneider Electric India Pvt Ltd, realizing a substantial return and recycling capital from mature assets.
- Schneider Electric's acquisition of Temasek's stake will provide complete operational control in an important and fast-growing market, allowing for streamlined decision-making, full integration into global operations, and future growth and investment in the region, particularly with India being its third-largest market.
