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Tata Group Is Preparing To Buy Majority Stake; Deal Is Expected To Be Completed In Two To Three Months

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Another Taiwanese company, which manufactures iPhones on contract for the American giant Apple, is going to be acquired by Tata Group. According to sources, Tata Group is preparing to buy a majority stake in the India unit of Taiwanese company Pegatron. 

The talks between both companies are in the process of progressing. Before this, Tata Group had purchased another contract manufacturer of Apple, Wistron. 

According to reports, the agreement is expected to be concluded in the next two to three months. However, it’s not yet known if this is a Wistron-like acquisition or a joint venture. Right now both options are open. 

Like Pegatron and Foxconn, Wistron also makes iPhones on contract for Apple. Tata Group bought its local unit for $125 million (Rs 1,000 crore) in November of last year. The company was the first Indian company to develop the iPhone.

When asked regarding the possibilities of Tata purchasing Pegatron, Electronics, IT and Railways Minister Ashwini Vaishnav said it was encouraging to learn that Indian experts are emerging as leaders in the mobile phone industry.

Since this industry is growing the number of young people have new opportunities to work.

A source said that the amount of this deal is going to be less than the Wistron deal. This is due to Pegatron being a tiny company and will have less than two more years under the incentive-based production (PLI) program after the acquisition is complete.

Tata Group is preparing to complete this deal through its subsidiary Tata Electronics.

What Is Apple’s Plan?

Experts say that Apple wants to close this deal as soon as possible so that there is no confusion regarding ownership before the annual launch. The company will launch new iPhones in September, whose production will start in June-August. 

Tata Group, Pegatron, and Apple have not responded to questions in this respect. Pegatron has about 9,500 employees in India and manufactures about 45 lakh iPhones annually. 

The company began its operations in India in 2022. India is the second-largest smartphone market in the world.

Pegatron is among three contract manufacturers Apple has selected in the Smartphone PLI scheme. It would only be a benefit for four years, as it started production one year later than Foxconn or Wistron.

The company has promised to invest Rs. 1132 crore between FY23-FY25 under the program of public-private partnerships.

Presently, Foxconn manufactures most of the iPhones in India. According to sources, if the deal between Tata and Pegatron is done then the employees of Pegatron will move to the new unit. 

A source said that Apple wants to expand its business in India and the acquisition of Pegatron by Tata could be part of this plan. Apple operates under this plan in China which is where 90% of its vendors are Chinese.

The case of Vietnam is different because there is no strong company there. The company makes iPad and Mac personal computers in Vietnam but iPhones are not made there.

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