Contract manufacturer for electronics Dixon Technologies and Chinese smartphone maker Vivo’s India unit have entered an agreement to launch an original equipment manufacturer (OEM) unit through a joint venture.
The two executed a binding term sheet for the proposed joint venture in India which will manufacture electronic devices including smartphones, Dixon said in a filing to the exchanges Sunday evening.
“The proposed joint venture 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,” Jerome Chen, chief executive officer of Vivo India.
Dixon shall hold 51% stake in the JV while the remaining 49% will be held by Vivo India.
“Neither Dixon nor vivo India will have any stake in each other,” Dixon clarified in the exchange filing.
The parties will agree on an optimum structure and the relevant terms and conditions to be set out in the definitive agreements and 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.
“We believe that this association will bolster our manufacturing excellence and superior execution abilities and Vivo’s leadership in the Indian business ecosystem. This partnership further strengthens our strong foothold in the Android smartphone ecosystem in India,” Atul B Lall, vice chairman and managing director, Dixon said.