Introduction

• L&T up to an hostile take over of Mindtree as it has set

aside ₹10,700 crore to buy up to 67% in Mindtree in a
hostile takeover. At ₹980 per share, It is a strategy
adopted by L&T to diversify it’s portfolio and invest in non
core business activities as it is in the business of
construction and investment in IT companies will diversify
there portfolio and will reduce the risk .
The strategy
 Problems for L&T
• High valuation of Mindtree.

• Increase exposure in non core activites.

• It is also taking a fair amount of risk related to integration

of Mindtree.

• The use its cash for an acquisition in a non-core business

raises pertinent questions about capital allocation as well.

• A slight increases in debt to equity ratio from 1.3 to 1.5

High valuation of Mindtree
 Benefits for L&T

• Diversification of portfolio.

• Good use of cash which was ideal in the balance sheet of

L&T.

• Gain from higher scale in some key verticals, which will

give access to some clients and projects, which
subsidiary, L&T Infotech Ltd, couldn’t target on its own.
 Benefits to Mindtree

L&T’s entry provides a nice exit opportunity for

Mindtree shareholders at the rate of Rs 980 which have
earned a good return for the investors of Mindtree.
 Conclusion

• There was a clear benefit for Mindtree as the company

was highly valued and it earned a good returns for the
investors , but when we talk about the L&T there is a
mixed situation the company has increased its exposure in
non core business activities but it can be set off if it’s
subsidiary is able to pool new clients . The key factor in
the success of this acquisition will be the synergy between
the two companies , If L&T able to develop the synergy
than this acquisition will be a great success.