Dixon, Vivo India to form new manufacturing joint venture in India

Despite their collaboration, neither Dixon nor Vivo India will hold stakes in each other, maintaining their independence outside the joint venture.

Dixon Technologies and Vivo India announced on December 15, the execution of a binding term sheet for a proposed joint venture. Dixon, a leader in electronics manufacturing in India, will hold a majority 51% stake in the joint venture, while Vivo India, a subsidiary of global smartphone giant Vivo, will hold the remaining 49%.

Moneycontrol on April 8 exclusively reported Vivo’s talks with India contract manufacturers including Dixon. Another Chinese handset maker Oppo is also engaging in discussions with various Indian companies in the handset sector.

Despite their collaboration, neither Dixon nor Vivo India will hold stakes in each other, maintaining their independence outside the joint venture. This ensures a clear focus on the objectives of the new entity while preserving the strategic interests of both parties.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, as per an official statement.

Atul B. Lall, Vice Chairman and Managing Director of Dixon, added “It gives us immense pleasure to partner with vivo India which is an iconic global brand and we see them as an ideal strategic partner that shares our core values of quality, engineering prowess and customer satisfaction. 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.

The Vivo partnership will help Dixon in strengthening its 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,” Lall said Jerome Chen, CEO of Vivo India, added “We are delighted to sign a term sheet with Dixon which boasts rich localized management experience and outstanding professional manufacturing prowess. 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,” he added.