Merger Lti Mindtree: Sandip Agarwal on the merger of the LTI-Mindtree entity

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“Pricing power, size, scale and all of those things will definitely be there because size gets bigger, but we have to see how things evolve over a period of time,” says Sandip AgarwalAVP, Edelweiss Financial.



L&T Infotech will give 73 shares for 100 MindTree shares. How do you see the merger ratio and what does it mean for shareholders?
It’s too early to comment on exactly who benefits and who loses, but basically it allows the joint entity to become much larger than before and in large transactions it will be extremely helpful for both companies to participate to large transactions to begin with.

There will also be cost synergies and the biggest benefit is that in the short term the merger will create a bigger brand to recruit or retain talent, although in the short term when such mergers occur some employees may want to leave the organization.

So how these things shape up will define the future, but going forward cost synergies and bigger brand to bring in employees and bigger size to get into big deals are the three benefits that we can derive from fusion.

What kind of synergies do you think this creates in terms of scale, size, pricing power, etc.? ?
Pricing power, size, scale and all of those things will definitely be there because size gets bigger, but we have to see how things evolve over a period of time. It’s very early to comment on anything specific about this. Everything we calculate on paper in terms of synergy and how achievable that is will depend on how it’s integrated and executed.

I would prefer to save comments for now and see how everything works before I can comment on anything about it.

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