Tata seals deal with Pegatron for iPhone plant in India's Tamil Nadu, sources say

Wistron

17/11/2024 07:24

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      Tata strengthens iPhone making operations with Pegatron
deal
    

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      Tata seals 60-40 JV with Pegatron for iPhone plant,
sources say
    

        * 
      Apple sees India as a key market, diversifying beyond
China
    

  
    By Munsif Vengattil and Aditya Kalra
       NEW DELHI, Nov 17 (Reuters) - India's Tata Electronics
has agreed to buy a majority stake in Taiwanese contract
manufacturer Pegatron's only iPhone plant in India, forming a
new joint venture that strengthens Tata's position as an Apple
supplier, two sources told Reuters.
    Under the deal announced internally last week, Tata will
hold 60% and run daily operations under the joint venture, while
Pegatron will hold the rest and provide technical support, said
the two sources, who declined to be named as the details are not
yet public.
        The sources did not elaborate on the financials of the
deal.
  
    Tata declined to comment, while Apple and Pegatron did not
respond to Reuters queries on Sunday.
    Reuters was first to report in April that Pegatron  4938.TW 
had the backing of Apple and was holding advanced talks to sell
its only iPhone plant in India to Tata, marking the Taiwanese
firm's latest scale back of its Apple  AAPL.O  partnership.
    Apple is increasingly looking to diversify its supply chain
beyond China amid geopolitical tensions between Beijing and
Washington. For India's Tata, the Chennai Pegatron plant will 
bolster its iPhone manufacturing plans.
    Tata is one of the largest conglomerates in India and has
been fast expanding into iPhone manufacturing, rivaling the only
other iPhone contract manufacturer operating in India, Foxconn
 2317.TW .
    The announcement for the deal's closure was made internally
at the iPhone plant on Friday, said the first source.
    The second source said the two companies plan to file for an
approval of the Competition Commission of India (CCI) in the
coming days.
    Tata already operates an iPhone assembly plant in the
southern state of Karnataka, which it took over from Taiwan's
Wistron  3231.TW  last year. It is also building another in
Hosur in Tamil Nadu, where it also has an iPhone component plant
which was involved in a fire incident in September.
    Analysts estimate India will contribute 20-25% of total
iPhone shipments this year, from 12-14% last year.
    The Tata-Pegatron plant, which has around 10,000 employees
and makes 5 million iPhones annually, will be Tata's third
iPhone factory in India.

 (Reporting by Munsif Vengattil and Aditya Kalra; Editing by
Lincoln Feast.)
 ((aditya.kalra@thomsonreuters.com; @adityakalra;))