The latest Rs 2,100 crore acquisition of Delhi-based C&S Electric by Siemen India has the potential to create the country’s second-largest player in the low voltage Switchgear market, according to US-based business consulting firm Frost & Sullivan.
“The Siemens India-C&S Electric combined entity would potentially jump to the second position in the pecking order of the Indian LV switchgear market, trailing behind Schneider Electric – L&T, once both the acquisitions are completed,” Amol Kotwal, Senior Director, and Supreeth Srinivasa Rao, Principal Consultant at Frost & Sullivan said in a note.
Both Siemens and C&S Electric already have a significant export business for LV Switchgear. According to Frost & Sullivan’s analysis, LV Switchgear market’s changing dynamics are expected to transform India into one of the few countries that will manufacture LV Switchgear for global markets and exports will get significant thrust in the coming years as a result of consolidation in the industry.
The Competition Commission of India (CCI) which approved the Schneider Electric-Larsen & Toubro’s (L&T) acquisition in mid-2019 is likely to take up Siemens-C&S Electric acquisition for consideration.
“As in the case of former, CCI found that due to the large market share of the involved entities, the combined entity would end up dominating the market leading to unfair competitive practices,” said the experts from Frost & Sullivan.
According to the consulting firm, it will be interesting to see how CCI will deal with this latest development by Siemens India, which is among the top three domestic participants, considering L&T and Schneider Electric as separate entities.