Dixon ties up with Vivo to make smartphones, shares soar

Contract manufacturer for Samsung Electronics Co. Dixon Technologies Ltd has signed a binding term sheet for setting up a new manufacturing joint venture (JV) with Vivo India, sending the shares of the electronics manufacturer soaring on Monday.

The venture will focus on the original equipment manufacturing (OEM) of electronic devices, including smartphones. Dixon will hold a 51% stake, while Vivo India will hold 49%.

Both Dixon and Vivo India said that they will not have a stake in each other.

The JV will handle some of Vivo India’s OEM orders and may engage in OEM business for other brands, they said.

“We believe that this association will bolster our manufacturing excellence and superior execution abilities and Vivo’s leadership in the Indian business ecosystem. We are excited to work together to create a stronger, more diversified, and future-proof organization,” Atul B Lall, vice chairman and managing director of Dixon said in a statement, adding, “This partnership further strengthens our strong foothold in the android smartphone ecosystem in India. There is immense potential to further build on shared capabilities together in times to come, to deliver sustainable growth for the proposed venture.”

Jerome Chen, CEO of Vivo India said, “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. This partnership will effectively complement the current manufacturing operations of vivo India.”

The agreement is subject to finalizing definitive agreements, regulatory approvals, and compliance with India’s foreign exchange control laws.