CCI Approves Acquisition of Pegatron India Stake by Tata Electronics and Business Transfer of TEL Components

TEPL, a wholly owned subsidiary of Tata Sons Private Limited, specializes in manufacturing high-precision components, notably for large clients in the smartphone industry.

The Competition Commission of India (CCI) has approved Tata Electronics Pvt. Ltd. (TEPL)'s acquisition of a majority shareholding in Pegatron Technology India Pvt. Ltd. (Pegatron India) and the transfer of TEL Components Pvt. Ltd. (TEL)’s business undertaking to Pegatron India, marking a significant move in the smartphone manufacturing and electronics services industry.

The acquisition involves two key steps:

1. Shareholding Acquisition: TEPL plans to acquire the majority shareholding of Pegatron India in two phases.
2. Business Transfer: TEL, a wholly owned subsidiary of TEPL, intends to transfer its business undertaking to Pegatron India.

About Tata Electronics Pvt. Ltd. (TEPL) and TEL

TEPL, a wholly owned subsidiary of Tata Sons Private Limited, specializes in manufacturing high-precision components, notably for large clients in the smartphone industry. TEPL produces smartphone enclosures (the frame on which other smartphone components are assembled). Additionally, TEPL, through its subsidiary Tata Electronics Systems Solutions (formerly known as Wistron Infocomm Manufacturing (India) Private Limited), provides Electronics Manufacturing Services (EMS) for smartphones.

TEPL is also setting up a greenfield facility aimed at expanding its capacity to provide EMS for smartphones, further strengthening its position in the global smartphone supply chain.

Pegatron India’s Role and Operations

Pegatron India, a subsidiary of Pegatron Corporation, is a key player in providing EMS for smartphones. The company caters to a prominent global smartphone brand, exporting its products to North America, Asia, and Europe, while also selling domestically in India. Pegatron India’s operations complement TEPL’s growing footprint in the smartphone manufacturing and EMS sectors.

Strategic Implications of the Deal

This combination is expected to enhance the capacity of both TEPL and Pegatron India in the fast-evolving smartphone manufacturing sector. It will also bolster the manufacturing ecosystem in India, as the business transfer and shareholding acquisition pave the way for a more integrated approach in delivering advanced electronic manufacturing services. The move aligns with the government's "Make in India" initiative and is expected to lead to greater collaboration and investment in the technology and electronics space.