Schneider Electric Acquires Full Ownership of Indian JV from Temasek for €5.5 Billion

Temasek had been considering an exit from the joint venture since last year, news reports have mentioned in recent past.

Schneider Electric, the global major in energy management and automation, will acquire the remaining 35% stake of unlisted Schneider Electric India (SEIPL) from Temasek for an all-cash consideration of €5.5 billion to reach full ownership, a company filing said on July 30.

Schneider Electric called the transaction 'the logical next step' in its strategic focus on India, which it called an 'attractive domestic growth market' and one of the 'key hubs' in its multi-hub strategy.

Among France’s biggest industrial companies, Schneider Electric has plans for an R&D and supply chain platform for the region and other emerging markets, and complete ownership of SEIPL will 'support speed of decision-making' for India as a hub, said the company.

Olivier Blum, Chief Executive Officer of Schneider Electric said, 'India is one of the key focus markets of Schneider Electric for the years to come and I am very excited by the prospect to capture the full growth potential of this unique opportunity we have in the country and also to leverage our exceptional talents in R&D, Digital and supply-chain in India to support our operations in the region and beyond.'

Temasek said the partnership with Schneider Electric has created long-term value. 'We have been privileged to journey alongside Schneider Electric India Private Limited and we look forward to seeing them grow as a leading franchise in India,' Chia Song Hwee, Deputy Chief Executive Officer of Temasek said.

Schneider Electric is bullish on India's growing economy and sees significant opportunities in digitalization and electrification. 'In the coming years, Schneider Electric expects double-digit CAGR organic sales growth for SEIPL. The Group also expects to further leverage India as an important R&D and supply-chain hub, particularly for Asia Pacific and other emerging markets, and plans to expand its capacity in India by 2.5x to 3x,' Schneider Electric said. Last year, SEIPL recorded a revenue of €1.8 billion - including exports - and its total sales in India was €2.5 billion, across subsidiaries.

The stake sale will go through regulatory approvals from the Competition Commission of India, and is expected to close in the coming quarters, said Schneider Electric.