Reliance Industries, India’s largest company in terms of market value, has agreed to acquire 50.1% in Sanmina SCI India for Rs 1,670 crore ($221 million), strengthening its play in electronics manufacturing. The remaining 49.9% will continue to be held by the US-listed Sanmina.
Reliance, through its 100% arm Reliance Strategic Business Ventures, will subscribe to new shares issued by Sanmina SCI to gain an ownership in the company, which has a 100-acre hitech manufacturing campus in Chennai, Tamil Nadu. In the same state, Reliance has a manufacturing facility in Sriperumbudur that makes the JioPhone and components for it. Likewise, it has a facility in the adjoining state of Andhra Pradesh (Tirupati).
While Reliance and Sanmina will initially focus on Chennai campus, both will look at new manufacturing sites in the country over time, based on business needs. The day-to-day business will continue to be managed by the existing team of Sanmina SCI, which raked in a revenue of Rs 1,230 crore ($165 million) in fiscal 2021, the two companies said.
In recent years, Reliance has moved away from traditional oil business by building new industries such as retail and telecom. It is currently switching to clean energy by investing across solar, batteries and hydrogen. Its M&A, expected to be completed by September, comes as India pushes for more investment in manufacturing to establish itself as an electronics production hub. Sanmina SCI will make hardware for will make hardware for 5G communications, cloud infra, medsystems, defence, aerospace and clean tech.