New Delhi: Noida-headquartered contract manufacturing company Dixon Technologies (India) Limited and Chinese smartphone maker Vivo’s India business have entered into a binding term sheet for a proposed joint venture where Dixon will take 51% share and the rest will be with Vivo.
The entity that will house the JV will become an original equipment manufacturer (OEM) like Dixon and make electronic devices, including smartphones.
“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,” the companies said in a joint statement on Sunday.
Mint had reported in July this year that Chinese smartphone makers like Vivo, Oppo and Xiaomi are looking to bring in Indian partners into their manufacturing operations while discussions for joint ventures where Indian entities could take majority ownership were ongoing.
Due course of the JV
Two people aware of the discussions said that the quantum of investment from both sides, manufacturing scale, and whether Dixon will take over any of Vivo’s existing or upcoming facilities, will be determined in due course.
Vivo had announced in 2019 that it will invest ₹7,500 crore to increase manufacturing in India.
Atul B. Lall, vice chairman and managing director of Dixon, said in the statement, “We believe that this association will bolster our manufacturing excellence and superior execution abilities and Vivo’s leadership in the Indian business ecosystem,” adding that the partnership would strengthen Dixon’s strong foothold in the Android smartphone ecosystem in India.
“There is immense potential to further build on shared capabilities together in times to come, to deliver sustainable growth for the proposed venture,” he added.
Jerome Chen, CEO of Vivo India, said in the same statement, “We are delighted to sign a term sheet with Dixon which boasts rich localized management experience and outstanding professional manufacturing prowess.”
He added that the partnership would effectively complement the current manufacturing operations of Vivo India.
The statement clarified that neither Dixon nor Vivo India will have any stake in each other and 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.
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