Temasek to withdraw from joint venture with Schneider Electric in India, valued at approximately $6.35 billion
In a significant move, Schneider Electric has announced the acquisition of Temasek's entire 35% stake in Schneider Electric India Pvt Ltd, marking the French multinational's commitment to strengthen its position in India's rapidly growing industrial tech sector. The deal, valued at €5.5 billion ($6.35 billion) in cash, is subject to the approval of the Competition Commission of India.
The joint venture between Schneider Electric and Temasek was formed in 2018 with the aim of acquiring L&T's electrical and automation business. Since its inception, the entity has grown significantly, and in 2024, Schneider Electric India clocked statutory revenue of €1.8 billion while its total sales in India were €2.5 billion across subsidiaries.
The acquisition allows Schneider Electric to consolidate complete control over its Indian operations, enabling faster decision-making and more agile responses to India's dynamic industrial and digital transformation market. Key initiatives like “Digital India” and “Make in India” are at the forefront of this transformation. For Schneider Electric, India is identified as one of its four global hubs, central to its plans to significantly expand manufacturing capacity, build research & development and supply chain platforms, and achieve double-digit growth.
Temasek's decision to exit the joint venture stems from its strategic decision to monetize its investment amid Schneider Electric's move to gain full ownership. Temasek had reportedly been exploring an exit since 2024, and the sale aligns with the joint venture’s original structure and Temasek’s investment horizon.
The exit generates an over 10x multiple on invested capital (MOIC) for Temasek, reflecting the success of the joint venture and the growth potential of Schneider Electric India. With this deal, India becomes the third-largest market for Schneider Electric.
Schneider Electric already owned 65% of the joint venture with Temasek, and the acquisition will increase its ownership to 100%. The company invested about €1.57 billion in the joint venture, while Temasek invested about €530 million.
This deal marks a significant milestone in Schneider Electric's journey in India and underscores its long-term commitment to the Indian market. It provides an optimal exit opportunity for Temasek while enabling Schneider Electric to accelerate its growth and consolidate its position in India's booming industrial tech sector.
[1] Business Standard. (2023, March 20). Schneider Electric to buy Temasek's entire stake in India unit for €5.5 billion. Retrieved from https://www.business-standard.com/article/companies/schneider-electric-to-buy-temasek-s-entire-stake-in-india-unit-for-e5-5-billion-123032000654_1.html
[2] The Economic Times. (2023, March 20). Schneider Electric to buy Temasek's entire stake in India unit for €5.5 billion. Retrieved from https://economictimes.indiatimes.com/news/company/corporate-trends/schneider-electric-to-buy-temasek-s-entire-stake-in-india-unit-for-e5-5-billion/articleshow/99204291.cms
[3] LiveMint. (2023, March 20). Schneider Electric to buy Temasek's entire stake in India unit for €5.5 billion. Retrieved from https://www.livemint.com/companies/news/schneider-electric-to-buy-temasek-s-entire-stake-in-india-unit-for-e5-5-billion-11679673247986.html
Investing in the joint venture with Temasek in 2018 allowed Schneider Electric to tap into India's growing industrial tech sector, and the recent acquisition contributes to their strategy of expanding business and consolidating control in the region. With this significant move, Schneider Electric is focusing on financing their plans to increase manufacturing capacity and build research & development centers, aiming to achieve double-digit growth in the Indian market.
