L&T to Acquire 21% Stake in E2E Networks; To Boost AI and Cloud Technologies

Larsen & Toubro (L&T) has announced a strategic partnership with E2E Networks, an Indian provider of cloud and AI cloud solutions. 

This collaboration marks a pivotal moment in the adoption of Generative AI (GenAI) solutions within India, aiming to fundamentally transform how accelerated computing on the cloud is utilized by Indian organizations. The partnership focuses on leveraging cloud GPUs to enable businesses to implement and evolve production-grade self-adapting AI software, ultimately facilitating a smoother journey towards AI adoption.

As part of this alliance, L&T will acquire a 21% equity stake in E2E Networks through a combination of primary and secondary transactions. This strategic move is designed to enhance L&T’s market presence in the rapidly growing sectors of AI and cloud services. 

By integrating E2E Networks’ innovative cloud and AI cloud platform with its own expertise in data centre management and cloud solutions, L&T aims to empower startups and enterprises alike, driving digital transformation across a multitude of industries. The overarching goal is to foster a technology-driven and sustainable future for India.

Acquisition Details

The acquisition will involve L&T purchasing a total of 4,171,410 equity shares in E2E Networks, i.e., a 21% stake. This will be executed through two distinct investments: a preferential allotment of 29,79,579 equity shares for a 15% stake, priced at ₹3,622.25 per share, amounting to ₹1,079.27 crore, and a secondary acquisition of 11,91,831 equity shares for a 6% stake from the founders, priced at ₹2,750 per share, totalling ₹327.75 crore.

Despite the significant investment, L&T will remain a minority shareholder in E2E Networks, without acquiring control over the company. However, this partnership will grant L&T certain protective rights and the opportunity to nominate up to two directors on the board of E2E Networks. 

Additionally, L&T plans to enter into a software license agreement, reseller agreement, and colocation agreement with E2E Networks, further solidifying their collaboration. The completion of this acquisition is expected by December 31, 2024.

On November 5, 2024, LT share price opened at ₹3,556.00, touching the day’s low at ₹3,541.90, as of 1:12 PM on the NSE.

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