Larsen & Toubro on Friday announced a merger between two of its publicly traded software firms L&T Infotech and Mindtree. The merger give potential to the combined entity to fight for mega deal wins with other IT giants.

“This merger represents our continued commitment to grow the IT services business in line with our strategic vision. The highly complementary businesses of LTI and Mindtree will make this integration a ‘win-win’ proposition for our customers, investors, shareholders, and employees," LTI chief A M Naik said.

Further, L&T Infotech informed the exchanges that its Managing Director and Chief Executive Officer Sanjay Jalona and Mindtree CEO Debashis Chatterjee will head the combined entity.

Larsen acquired control of Mindtree in 2019. The conglomerate holds about a 61 per cent stake in the company, which has a market value of $8.3 billion, and has around 74 per cent of L&T Infotech, which has a market capitalization of $13.6 billion.

Mindtree's recently reported fourth-quarter net income rose 49 per cent to Rs 473 crore, while L&T Infotech posted a 17 per cent rise in net profit at Rs 637 crore.

Upon the scheme becoming effective, all shareholders of Mindtree will be issued shares of L&T Infotech at the ratio of 73 shares of LTI for every 100 shares of Mindtree. The new shares of LTI so issued will be traded on the NSE and BSE.

For now, the companies will continue to function independently. A steering committee will be set up to oversee the transition till the merger process is complete.