Tata closes takeover of Wistron plant

Salt-to-software conglomerate, the Tata group is inching closer to taking over an Apple iPhone plant in the south of India. This deal would effectively give the country its first homegrown iPhone maker, according to a Bloomberg report.

The Tata group has been in talks with the factory’s owner, Taiwan’s Wistron Corp., for months, and is looking to complete the purchase by the end of March, the report added.

The two organisations involved have discussed various potential tie-ups but talks have now centered on Tata taking a majority of a joint venture. This means Tata will oversee the main manufacturing operation, with support from Wistron.

The Indian conglomerate aims to complete a due diligence process by March 31 so that its Tata Electronics arm can formally take over Wistron’s position in a program that gives it government incentives, the report further added.

The next cycle of incentives will begin on April 1, which marks the start of India’s financial year.

The acquisition could value Wistron’s only iPhone manufacturing operation in India at more than $600 million if the Taiwanese company meets the requirements to receive the expected incentives for the current financial year, according to Bloomberg’s sources.

Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron Corp. It has sought to diversify its business beyond thin-margin iPhone manufacturing into areas such as servers, agreeing to sell its iPhone production business in China to a competitor in 2020.

Wistron’s 2.2 million-square-foot factory is located just over 30 miles (50 kilometers) east of Bangalore. If the acquisition goes through, Tata will take over all its eight iPhone lines, as well as the plant’s 10,000 workers, including a couple thousand engineers. Wistron would continue as a service partner for iPhones in India.

Meanwhile, Tata group is also foraying into the retail aspect with Infiniti Retail which introduced its plans to open 100 stores across the country that will only sell Apple products. BusinessToday