 L&T is a diversified conglomerate and the lion share of the revenue comes from the

construction business which is very subjective and the profits are only when there is
a momentum in the economy and when people are building industry and there is a
infrastructure spending.
 In the last decade L&T also tried to merge with Satyam computers to diversify its
business model and enter into the service IT sector of this business but lost to the
cutthroat bid of 2900 crores from Tech Mahindra and failed to acquire Satyam
computers in 2013.
 Now to diversify their revenue L&T strategically wanted to expand the growing
service sector of industry and service fee which is largely technology and financial
services with this it will help the company to play with the mass market and acquire
more customer base in the form of construction and as well as the service sector of
the industry.

Plan to Acquire
 Founder promoter only had 13 percent of the company and the single largest
shareholder was Vijay Siddhartha who was literally the quasi promoted with largest
shareholder of 20.4%.
 Siddharth needed an exit because he was having his own security pressure and was
highly levered, so he approached L&T and asked them if they would buy his shares
L&T sensed an opportunity and agreed to the offer but the management resisted by
saying that L&T working ethos is very different from theirs.
 Founders only had 13% of the shares and try to launch a buyback now as discussed
in the class there are certain rules to buy back in this country you can only do a
buyback of 25% of your net worth but that won’t cut for the founder group as L&T
was Buying 20.4% from Siddhartha and then they asked their 2 corporate brokers
axis and Citi lure of 31 % from the other shareholders and FPI which will make 20+31
= 51 and they would also and they also offered an additional of 15% of open offer
the public at the price of 980 per share which will make the total of 66%. And
successfully acquired 60% of the shareholding in the mindtree in June 2019.
 Now two things cannot happen simultaneously once you have said you are going to
launch an open offer a Buy back which is a counter from mindtree can only happen
after the open offer window is closed. If the open offer happen first and successful
then mind tree could not do anything and buy back would be null and void. Which
pretty much happened in this particular hostile takeover.
 L&T Infotech, Mindtree, their shareholders, their management and a lot many
others. As they say 1+1 = 11. This acquisitions seems to prove that.