Corporate Updates

Philips, GE, Siemens eye Larson and Toubro medical division

International majors such as Philips, General Electric (GE) and Siemens are believed to be in the race for acquiring the medical equipment business of Larsen and Toubro (L&T). The medical equipment division, known as L&T Medical, has been put on the block by the engineering and construction company as a part of its strategy to exit non-core businesses. Sources familiar with the development said the deal was likely to be clinched in a month. Market sources estimate the deal value to be around INR 200 crore. The division has posted a revenue of Rs 180 crore and a profit of around INR 20 crore in the last financial year. The medical equipment division has been put on the block by the engineering and construction firm as a part of its strategy to exit non-core businesses. The deal is likely to be sealed in a month and market sources value it around INR 200 crore. When contacted, L&T Medical Director R N Mukhija said the company had various proposals before it, including roping in a partner and running the business or selling it off, but nothing had been finalised. “There are rumours in the market that the division might be closed down. It is absolutely wrong and the company will not move out, dissatisfying shareholders and employees,” he added. The company has obtained shareholders’ approval for disposing of the medical equipment business. It intends to sell only if it receives an attractive offer, the company said in a statement. On Wednesday, the L&T scrip fell 4.11 per cent on BSE and closed at INR 966.65. L&T, which sold off its cement company to the Birlas, had hived off its ready-mix concrete (RMC) business, L&T Concrete, and sold it off to French major Lafarge in May this year to focus solely on the engineering and construction business. Among other non-core businesses that L&T had sold are its bottle plant in Nashik and the dairy equipment business. The company, which started medical equipment and systems division in 1987, makes a range of products and equipment, including patient-monitoring systems such as ECG, pulse oximetry, invasive BP, Capnography and anaesthesia gas monitor. As Philips, GE and Siemens are in the same business, the acquisition will help them leverage their bottom line growth. At least four out of five hospitals in almost all the cities across the country use L&T Medical’s products, claims the company. These products are exported to the US, Latin America, Europe, South-East Asia, West Asia and African and Asian countries.

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