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New Delhi: In a major booster for India’s efforts to localise Chinese investments in India, smartphone giant Vivo has decided to form a joint venture with domestic Dixon Technologies for contract manufacturing its devices and other electronics products. Dixon will hold 51% stake in the JV, while the remaining will be with Vivo India.
Dixon and Vivo India said entered into a Binding Term Sheet for the proposed JV to undertake OEM business of electronic devices, including smartphones. However, neither Dixon nor Vivo India will have any stake in each other.
“The facility will undertake part of Vivo’s OEM orders of smartphones in India, and can also engage in OEM business of various electronic products of other brands,” Dixon said, emphasising that the deal will not have any impact on its contract manufacturing business for other brands such as Motorola and Nokia.
“The parties will agree on an optimum structure and the relevant terms and conditions to be set out in the definitive agreements. The transaction will be subject to execution of such definitive agreements, completion of customary conditions precedent and receipt of applicable regulatory approvals including as required under the foreign exchange control laws of India,” the company said.
Tata group was also believed to be looking at a deal with Vivo India, but it could not materialise.
Dixon Vice Chairman and MD Atul B Lall said the company sees Vivo India as an “ideal strategic partner” that shares its core values of quality, engineering prowess and customer satisfaction. “We believe that this association will bolster our manufacturing excellence and superior execution abilities and Vivo’s leadership in the Indian business ecosystem. We are excited to work together to create a stronger, more diversified, and future-proof organization. “
Jerome Chen, CEO of Vivo India said the deal with Dixon gets “rich localized management experience and outstanding professional manufacturing” prowess. “The proposed JV will undertake part of Vivo’s OEM orders of smartphones in India, and can also engage in OEM business of various electronic products of other brands. This partnership will effectively complement the current manufacturing operations of Vivo India,” Chen said.
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