Larsen and Toubro Ltd (L&T), India’s biggest engineering company, has agreed to sell unit EWAC Alloys Ltd to the UK-based ESAB Holdings Ltd for Rs 522 crore ($80 million).
The deal is likely to be completed within two months, L&T said in a stock-exchange filing on Wednesday.
This is L&T’s second sale of a wholly owned subsidiary within two months; it had agreed to sell unit L&T Cutting Tools Ltd to a company owned by billionaire US investor Warren Buffett-led Berkshire Hathaway Inc for Rs 174 crore.
EWAC makes welding products such as electrodes, gas brazing rods, welding torches and accessories at its factory in Ankleshwar, Gujarat. The company was started as a joint venture of L&T and Germany’s Messer Eutectic Castolin Group. In 2011, it became a wholly owned subsidiary of L&T.
L&T said EWAC posted revenue of Rs 211.2 crore for the year through March 2017. This is about 0.19% of L&T’s consolidated revenue.
ESAB makes a range of products for welding and cutting processes. The company’s origin dates back more than a hundred years when it was started by a Swedish engineer in 1904. It shifted its headquarters to the UK in 2002 and was acquired by US-based Colfax Corp in 2012.
The group operates in India through Mumbai-listed ESAB India Ltd. ESAB India started its operations in 1987 by acquiring the welding business of Peico Electronics & Electricals Ltd (now Philips India Ltd), according to its website.
In 1991, it bought Indian Oxygen Ltd’s welding business and a year later purchased Flotech Welding & Cutting Systems Ltd. This was followed by the merger of Maharashtra Weldaids Ltd in 1994, the website shows. ESAB India has factories in Kolkata, Chennai and Nagpur.