The Tata Group is about to take over the iPhone maker’s plant near Bengaluru

The Tata Group is about to take over a major plant in southern India in a deal that would give the country its first homegrown iPhone maker.

The airline-to-software conglomerate has been in talks with the factory’s owner, Taiwan’s Wistron Corp., for months and aims to complete the purchase by the end of March, according to two people familiar with the process. The two companies discussed various potential mergers, but talks have now focused on Tata taking a majority stake in a joint venture, the people said. Tata is said to oversee the main manufacturing facility with support from Wistron, the people said, asking not to be named as the plans are not public.

Apple Inc.’s iPhones are mostly assembled by Taiwanese manufacturing giants like Wistron and Foxconn Technology Group. Tata’s deal would advance India’s efforts to create local competitors to challenge China’s dominance in electronics, threatened by political tensions with the US and Covid-related hurdles.

The Indian conglomerate is aiming to complete a due diligence process by March 31 so its Tata Electronics arm can formally take over Wistron’s position in a program that gives it government incentives, one of the people said. The next incentive cycle starts on April 1st, which marks the beginning of the Indian fiscal year.

The acquisition could value Wistron’s sole iPhone manufacturing operation in India at more than $600 million if the Taiwanese company meets the requirements to receive the expected stimulus for the current fiscal year, one of the people said.

A Tata representative declined to comment. Wistron and Apple did not respond to requests for comment.

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Wistron is alongside Foxconn and Pegatron Corp. one of three Taiwanese iPhone makers in India. The company has sought to diversify its business beyond low-margin iPhone manufacturing into areas like servers and has agreed to sell its iPhone manufacturing business in China to a competitor in 2020.

But while Wistron plans to exit iPhone manufacturing in India, its Taiwanese competitors are expanding their iPhone production lines. Apple, the world’s most profitable smartphone maker, is trying to reduce its reliance on China, where pandemic-related supply chain problems and draconian restrictions have ravaged device production.

Wistron’s 2.2 million square foot factory is located just over 50 kilometers east of Bangalore. If the acquisition goes through, Tata will take over all eight iPhone lines as well as the plant’s 10,000 workers, including a few thousand engineers. Wistron would continue to act as a service partner for iPhones in India.

Tata has taken further steps to grow its business with Apple. The company has accelerated hiring at its factory in Hosur, near Bangalore, which makes iPhone components. This facility sits on hundreds of acres of land where Tata could add iPhone production lines in the years to come. Tata has also announced plans to open 100 Apple Stores in the country of 1.4 billion, the first of which is slated to open this quarter in Mumbai.

The 150-year-old Tata Group manufactures everything from branded salt and Tetley tea to Steel and Jaguar cars, and operates an airline and Starbucks cafes in the country. His Tata Consultancy Services Ltd. is Asia’s largest IT outsourcing company and one of India’s most valuable by market capitalization.

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In recent years, Chairman Natarajan Chandrasekaran has accelerated efforts to make the conglomerate more tech-centric with a series of e-commerce initiatives and a new super app called Tata Neu. The group is also set to get into chip manufacturing, Chandrasekaran said last year.

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