Mindtree and Larsen & Toubro Infotech, two software units controlled by a Mumbai-based engineering conglomerate, have agreed to merge as they seek scale to compete with global digital giants.

Shareholders of Mindtree will be issued 73 L&T Infotech shares for every 100 shares held, according to an exchange filing by the companies on Friday evening. The announcement confirms an earlier Bloomberg News report.

The proposed merger comes as software companies see surging demand from businesses embracing the digitalisation that accelerated during Covid-19.

Large IT outsourcing firms are also expanding into areas including cybersecurity, automation, and machine-learning support, moving beyond lower-margin traditional back-room services. BLOOMBERG