Reliance Strategic Business Ventures, a wholly-owned arm of RIL, will hold 50.1 per cent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 per cent
New Delhi: Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), on Thursday said that it has tied up with US-listed Sanmina Corp to create a a joint venture (JV) for making electronic products in Chennai.
According to the joint statement issued by the two companies, RSBVL will hold 50.1 per cent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 per cent.
Reliance Industries on Thursday said that it will achieve this ownership primarily through an investment of up to Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, while Sanmina will contribute its existing contract manufacturing business. As a result of the investment, the joint venture will be capitalised with over $200 million of cash to fund growth.
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The JV aims to make hardware for 5G communications, Cloud infrastructure, health care systems, and defence, and aerospace, the statement said.
All manufacturing will initially take place on Sanmina’s campus in Chennai, with an option for expansion in other manufacturing sites within the country. The campus is spread over 100 acres and hosts a ‘centre of excellence’ for electronics manufacturing, research, and prototyping.
In addition to supporting Sanmina’s current customer base, the JV will create a state-of-the-art ‘Manufacturing Technology Center of Excellence’ that will serve as an incubation center to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading-edge technologies, the statement said.
Completion of the transaction is subject to customary closing conditions, including regulatory approvals, RIL said adding that, the transaction is expected to close no later than September 2022.
Reliance Jio Director Akash Ambani said, “We are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India.”
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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.
Sanmina’s Chairman and Chief Executive Officer Jure Sola said, “We are excited to partner Reliance to build the premier integrated manufacturing solutions company in India.”
