Dixon said it has signed a binding term sheet under which the electronics maker will hold 51% of the share capital and Vivo India will hold 49% stake. Neither Dixon nor Vivo India has any interest in each other as part of this agreement.
The companies did not disclose financial details of the deal.
The agreement is subject to regulatory approvals as well as the “optimal structure and associated terms” set out in the final agreement, but the Indian government will encourage Chinese companies operating in India to set up joint ventures with India. It was done under prompting. entity.
The government has also asked Chinese smartphone brands to bring in Indian capital partners for their local operations and appoint Indian executives to key roles in their India operations. The move comes after the Chinese mobile phone brand was accused of violating Indian laws, tax evasion and foreign exchange violations.
“We believe this association will strengthen our manufacturing excellence and execution capabilities, as well as vivo’s leadership in the Indian business ecosystem. “We will emerge stronger, more diverse and We are excited to work together to build a future-proof organization,” Atul B. Lal, vice chairman and managing director of Dixon, said in a statement. This partnership further strengthens Dixon’s strong foothold in Android smartphones. Mr. Lal spoke about India’s ecosystem. Dixon manufactures smartphones for almost all the top smartphone brands, including Samsung, Xiaomi, Motorola, Oppo, Transsion, Google, and Nothing. Under the new joint venture, Dixon will also manufacture smartphones for Vivo. The joint venture can also undertake the production of other brands.
“The proposed joint venture will undertake a portion of OEM orders for vivo’s smartphones in India, as well as engage in OEM business for various electronic products of other brands.” It will effectively complement India’s current manufacturing operations,” said Jerome Chen, CEO of Vivo India.
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Vivo, which recently completed 10 years of operations in India, has invested Rs 3,000 crore to open a new 170-acre manufacturing facility in Greater Noida with the capacity to produce 120 million smartphones annually. There is. The old manufacturing division, which had an annual production capacity of 40 million units, was also withdrawn. This factory has now been taken over by Bhagwati Products (Micromax).
The joint venture will enable Vivo to leverage the Centre’s ‘Make in India’ policy and increase the competitiveness of its manufacturing operations in the market. It is unclear whether the joint venture agreement also includes the export of mobile phones from India.
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The smartphone giant was reportedly in talks with several other Indian companies, including Tata Group, to set up a joint venture, but the talks broke down in June due to disagreements over valuation. ET reported.
The joint venture deal with Vivo follows earlier this year when Dixon acquired a majority stake in Ismartu India, the manufacturing arm of Chinese brand Transsion Holdings, where Dixon acquired a 50.10% stake for Rs 238.36 crore in cash. This is the company’s second partnership with a Chinese mobile phone brand.
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