India’s Reliance Industries said on Thursday it would invest Rs 1670 cr to create a joint venture (JV) with U.S.-listed Sanmina Corp for making electronic products in Chennai.
The JV aims to make hardware for 5G communications, cloud infrastructure, healthcare systems, and defense and aerospace, Reliance said in a regulatory filing.
Reliance will hold a 50.1 per cent stake in the JV after the investment in Sanmina's existing Indian entity through a Reliance unit. Sanmina will contribute its existing contract manufacturing business to the JV.
All manufacturing will initially take place at Sanmina's campus in Chennai, with an option for expansion in other manufacturing sites within the country.
The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai, said a statement from the two sides. The JV will create an electronic manufacturing hub, prioritising high technology infrastructure hardware
“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” stated Jure Sola, Chairman and Chief Executive Officer of Sanmina.
“We are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India,” said Akash Ambani, Director, Reliance Jio, said.
Sanmina's campus in Chennai is spread over 100 acres and hosts a "centre of excellence" for electronics manufacturing, research and prototyping.
Completion of the transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than September 2022.
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