(Bloomberg) — Tata Group may close a deal to take control of Pegatron Corp.’s iPhone manufacturing operations. in India in May, consolidating Apple Inc.’s relationship with one of the country’s most influential conglomerates.
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The Tata Group is in the final stages of talks with Pegatron to acquire a majority stake in the Taiwanese company’s Apple device assembly operations in India, according to people with knowledge of the matter. They include an iPhone production factory near Chennai in the southern Indian state of Tamil Nadu and another under construction.
After the transaction, Pegatron is expected to help Tata with manufacturing expertise, said the people, who asked not to be identified because the information is private.
Tata Electronics Ltd. will manage Pegatron’s operations after the deal is completed, they said. Reuters reported on the talks earlier this month.
A Tata representative declined to comment, while Pegatron did not respond to a request for comment.
The potential deal comes as Apple accelerates its efforts to increase production in India, helped by financial incentives offered by Prime Minister Narendra Modi’s government, while also diversifying its supply chain outside of China to mitigate geopolitical risks.
Modi, who is seeking a third five-year term, has offered production-linked subsidies to encourage Apple’s key suppliers, including Taiwan’s Foxconn Technology Group and Pegatron, to increase production in India.
Read: Booming India prepares to take China’s global growth crown
The Tata Group has become an iPhone assembler by acquiring an iPhone factory from Taiwan’s Wistron Corp. in the neighboring state of Karnataka. It is also planning to build a new iPhone production factory to strengthen its partnership with Apple.
–With assistance from Sankalp Phartiyal and Jane Lanhee Lee.
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