Tata in Talks to Buy Pegatron’s iPhone Operations as Soon as May

(Bloomberg) -- Tata Group may strike a deal to take control of Pegatron Corp.’s iPhone manufacturing operations in India as soon as May, cementing Apple Inc.’s relationship with one of the country’s most influential conglomerates.

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Tata Group is in the final stages of negotiations with Pegatron to take a majority stake in the Taiwanese firm’s Apple handset assembly operations in India, according to people with knowledge of the matter. They include an iPhone production plant near Chennai in India’s southern state of Tamil Nadu and another one under construction.

Following the transaction, Pegatron is expected to help Tata with manufacturing expertise, the people said, who asked not to be identified because the information is private.

Tata Electronics Ltd. will run Pegatron’s operations after the deal is completed, they said. Reuters reported about the talks earlier this month.

A representative for Tata declined to comment, while Pegatron didn’t respond to a request for comment.

The potential agreement comes as Apple is accelerating its efforts to boost output in India, aided by financial incentives offered by the government of Prime Minister Narendra Modi, while diversifying its supply chain away from China to mitigate geopolitical risks.

Modi, who is seeking a third five-year term, has offered production-linked subsidies to spur key Apple suppliers including Taiwan’s Foxconn Technology Group and Pegatron to ramp up production in India.

Read: Booming India Prepares to Take China’s Global Growth Crown

Tata Group first became 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 plant to strengthen its partnership with Apple.

--With assistance from Sankalp Phartiyal and Jane Lanhee Lee.

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