Larsen & Toubro, one of Asia's largest vertically integrated engineering and construction conglomerates, has entered into an agreement to acquire a 50 per cent stake in the carved out upstream engineering business related to oil and gas production and exploration of the Bangalore-based Valdel Engineers & Constructors.

No financial details of the deal were disclosed. Valdel Engineers, earlier part of the M S Ramaiah Group, according to industry estimates reported a topline of Rs 20 crore (Rs 200 million) for the last fiscal.

The upstream engineering business will be named as L&T Valdel Engineering Pvt Ltd. The new JV will explore and expand prospects in detailed engineering for the upstream oil and gas segment and look for new opportunities.

K Venkataramanan, member of the board and president (operations), L&T said: "We are keen to grow in the engineering space and offer design and engineering services for the oil and gas industry. This acquisition would help us in that direction. We have worked together with Valdel from their inception as John Brown Technologies India in 1991."

M J Shantharam, managing director, Valdel Corporation, the holding Company of Valdel Engineers & Constructors said: "L&T has been one of our key customers and this transition into a partnership gives us complete synergy to strengthen our position in the upstream engineering services sector, in domestic and international markets. We believe this will bring scale to the current level of operation, thereby leading to cost efficiency."

Valdel, in addition to engineering business, has presence in retail business, which has a topline of close to Rs 30 crore (Rs 300 million). The group also has forayed into BPO business, which has a topline of $25 million.