The boards of Larsen & Toubro Infotech and IT major Mindtree are likely to meet next week to finalize the merger deal between the two in a single entity, The Economics Times reported citing sources. The report said that with the deal, the L&T infotech will surpass Tech Mahindra, to become the fifth-largest IT company in terms of market capitalization.
Bloomberg had earlier reported the possible merger of both L&T subsidiaries into a $22 billion firm. L&T holds a 74 per cent stake in L&T Infotech. Mindtree, which has a market valuation of $8.3 billion, was acquired by L&T in 2019 for a 61 per cent stake.
According to the Bloomberg report, “The proposed merger comes as software companies are seeing surging demand from businesses embracing the digitization that accelerated during Covid-19. Large IT outsourcing firms are also expanding into areas such as cybersecurity, automation, and machine-learning support, moving beyond lower-margin traditional back-room services.”