Temasek Holdings in talks to sell stake in Schneider Electric India JV

SINGAPORE: State investment firm Temasek Holdings is in discussions to sell its 35% stake in Schneider Electric India to the French multinational. This could value the joint venture (JV) at $5 billion.

This is a reflection of Temasek’s evolving India strategy and the growing appeal of the India market to global investors. The increased control by Schneider also limits opportunities for new entrants in India’s low-voltage switchgear and industrial automation market by limiting the space for new entrants.

Temasek plans to focus on companies that can benefit from a growing middle class and consumer demand in India. The subcontinent makes up 5% of its total portfolio as of March 2025, where it plans to invest US$10 billion over the next three years.

For Schneider, gaining full ownership of its India unit strengthens its strategic position in India. It also enhances its operational efficiency and decision-making, increasing investor confidence in Schneider’s long-term growth.

Temasek is currently seeking to back companies with brands that have long-term consumer appeal. As part of this, it is selling off mature assets to maximise returns. The sale of its minority stake to Schneider Electric SE, simplified the ownership structure of the JV and strengthened the company’s position in an important growth market.

India is Schneider Electric’s third-largest market. It is key to its shift from a traditional electrical equipment maker to a full provider of industrial solutions. The potential acquisition comes amid rising Indian M&A activity, with deal values reaching $31 billion this year, a 16% increase from last year.

If the deal successfully closes, it would have 16% premium over Schneider Electric India’s current market value and boost investor sentiment. However, talks are still ongoing and final terms are not set.

The transaction has larger market effects. After Schneider’s 2019 purchase of Larsen & Toubro’s electrical business, regulations were established to prevent market control. Greater control could further tighten the low-voltage switchgear and industrial automation sectors.

The exit of Temasek highlights its refocus to invest in high-growth sectors in India and globally. Its recently released Temasek Review 2025 saw it post a record portfolio of US$324 billion. It is ranked the 11th largest sovereign wealth fund in the world by research firm GlobalSWF.