L&T may be close to selling off its valves business for around $500 million with Finnish firm Metso and US-listed Pentair emerging as frontrunners to acquire the unit, according to sources aware of the negotiations. The sale of the unit is part of an exercise by L&T to exit non-core businesses and sell stakes in others to streamline operations and focus on businesses with scale. These sales could fetch L&T $1 billion. L&T has mandated Citigroup to scout for buyers for some non-core businesses. The engineering giant has been consistently exiting noncore business such as cement, making pumps for fuel retail outfits, and most recently, a port project at Dhamra in Odisha. L&T along with Metso and Pentair are declining to comment.
The sources, who sought anonymity, said among the non-core businesses the company plans to exit, the first could be the sale of L&T Valves. The company, formerly known as Audco India, is a wholly owned arm of L&T and provides flow-control solutions to sectors such as oil & gas, power, petrochemical, chemical, fertilisers and pharmaceuticals.
L&T Valves has a global marketing network and strategic alliances with key international distributors, making it an attractive buy for global engineering solutions providers. The company manufactures valves at its facilities at Chennai, Coimbatore and Kancheepuram.