Hello Tata, goodbye Wistron: The anatomy of a $750 million takeover deal

Mumbai: The Tata Group‘s acquisition of Wistron‘s manufacturing facility, which will make it the first Indian firm to assemble iPhones, is worth a total $750 million inclusive of debt, said people with knowledge of the matter. Both sides signed the takeover deal on Wednesday, they said.

The plan that was unveiled on October 27 had said Tata would pay $125 million but that’s only the equity cheque, said the people cited above. There is another $75-80 million term debt in the target company that will now get loaded on to the acquirer, they said. Additionally, there is a $550 million inter-corporate loan given by the parent to Wistron India. ET spoke to multiple people on both sides and others with knowledge of the matter to gather the granular details, hitherto unreported.

The $550 million inter-corporate loan was infused by the Taiwanese parent as an unsecured working capital loan in its Indian arm against receivables from Apple, the company whose products were being manufactured by the vendor at the Kolar plant that employs 14,000-15,000 people. The local Wistron unit is being taken over by Tata Electronics Pvt Ltd (TEPL), which has a manufacturing plant in Hosur, Tamil Nadu.

TEPL is a wholly owned subsidiary of Tata Sons.

Given Apple’s impeccable credentials, banks will refinance the facility on behalf of Tata in what is called receivable financing or ‘factoring’. Citi, the adviser to the transaction along with AZB, is believed to be leading this initiative as well. Banks typically syndicate or sell down such loans to other financial institutions and peers.

Tata and Wistron did not respond to ET’s queries.ET was the first to report on November 30 last year that TEPL, already among Apple’s component suppliers in India, had started discussions with Wistron to buy its plants. Wistron is one of the three top vendors for Apple in India, along with Foxconn and Pegatron.The Wistron purchase is expected to spur the next cycle of investments in the Indian electronics manufacturing ecosystem and signals the maturing of the country’s contract manufacturing companies, minister of state for electronics and information technology Rajeev Chandrasekhar told ET last week.

“I think Tata’s entry definitely signals that the Indian EMS (electronic manufacturing service) has (now) a giant Indian company which does manufacturing for global brands (in the) present and is maturing now,” he said.

Wistron currently has four assembly lines for iPhone production. A facility in Peenya, Bengaluru, is out of commission, while a third is used for the repair of Apple products. The company had been about to open another manufacturing facility in Kolar by the end of November, with production beginning in January 2024.

“The Wistron acquisition will help Tata move up the Apple value chain,” said a telecom hardware industry executive on condition of anonymity. “With Wistron’s existing knowhow, Tata will now be the first homegrown vendor to make iPhones. At the Hosur plant, the Tatas were primarily focussing on iPhone casings with only 15-20% of consumables locally sourced. This will be a serious leg-up.”

According to a report by JPMorgan, Apple plans to shift 25% of its iPhone production to India by 2025 in a bid to diversify its manufacturing base, which is currently concentrated in China.


On October 27, Taiwan’s Wistron Corp announced that its board had approved the signing of a share purchase agreement by subsidiaries SMS Infocomm Singapore Pte Ltd and Wistron Hong Kong Ltd with TEPL. The transaction would involve the sale of its 100% indirect stake in Winstron Infocomm Manufacturing (India) Pvt Ltd (WMMI) for an estimated $125 million (Rs 1,000 crore). Simultaneously, SMS InfoComm (Singapore) Pte Ltd announced a proposal to convert debt of $130.26 million, including accrued interest, extended by WMMI in the form of external commercial borrowing (ECBs) into equity.

Chandrasekhar had tweeted the breaking news, lauding India’s largest business group and the flagship production-linked incentive (PLI) scheme introduced by the Narendra Modi government to bolster domestic manufacturing.

Tata Sons chairman N Chandrasekaran has been pushing the group’s ambitions to become a scaled mobile phone and component contract manufacturer to leverage geopolitical headwinds against China and persuade companies such as Apple to shift to alternative production sites in India.


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