L&T to Acquire 21% Stake in E2E Networks
Larsen & Toubro (L&T) has announced plans to acquire a 21% stake in E2E Networks, a cloud services company based in Delhi. This strategic move aims to enhance L&T’s presence in the fields of artificial intelligence (AI) and cloud services.
Investment Details
The acquisition involves an investment of approximately Rs 1,407.02 Crore. L&T will acquire a 15% stake through new shares for Rs 1,079.27 Crore and a 6% stake from the company’s founder for Rs 327.75 Crore. The investment will be made through a combination of a preferential allotment and a secondary acquisition.
About E2E Networks
Founded in 2009, E2E Networks specializes in cloud computing platforms that support large-scale AI workloads. The company has partnerships with major technology firms like NVIDIA, Intel, and Microsoft. E2E Networks has shown significant growth, with revenues increasing from Rs 51.87 Crore in FY 2021-22 to Rs 94.46 Crore in FY 2023-24, serving over 3,000 clients across ten countries.
Strategic Benefits
This acquisition will make L&T a minority shareholder in E2E Networks, allowing it to nominate two directors to the board and gain certain protective rights. The acquisition is expected to be completed by December 31, 2024, without requiring regulatory approvals.
Market Impact
Following the announcement, E2E Networks shares surged by 5% to Rs 4977.50.
Doubts Revealed
L&T -: L&T stands for Larsen & Toubro, which is a big company in India that works in many areas like construction, engineering, and technology.
E2E Networks -: E2E Networks is a company based in Delhi, India, that provides cloud services, which means they help other companies store and manage their data on the internet.
AI -: AI stands for Artificial Intelligence, which is a type of technology that allows computers to think and learn like humans.
Cloud Services -: Cloud services are online services that allow people and companies to store and access their data and applications over the internet instead of on their own computers.
Stake -: A stake is a share or part of a company that someone owns. If you have a stake in a company, you own a piece of it.
Crore -: A crore is a unit in the Indian numbering system equal to ten million (10,000,000). It is often used to talk about large amounts of money in India.
Minority Shareholder -: A minority shareholder is someone who owns less than half of a company’s shares, meaning they have less control over the company’s decisions.