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Bengaluru-based IT equipment maker Iliyat Electronics, the Indian division of the global electronics and telecommunications company Philips Corp., has agreed to buy the U.S.-based consumer electronics company, Foxconn Technology Group.
The deal, the largest ever made in India, will add 100,000 employees at Iliyat Electronics’s manufacturing facility in Karnataka and is expected to generate an additional cost of $1 billion, according to Reuters. Foxconn Technology Group has made its name on building the world’s largest production lines for computers and consumer electronics such as Apple Inc. and Nokia Corp..
An official with Philips Consumer Brands Inc., which owns Iliyat Electronics, said Philips was keen on the Iliyat Electronics strategy as it sees strong growth opportunities in the U.S. and the future of manufacturing in India, Reuters reported.
“The agreement is a strategic partnership that gives Philips the opportunity to expand its consumer electronics footprint in India and expand into key markets such as India,” said Janice Williams, managing director and head of Philips Consumer Brands, in a statement on Wednesday.
Iliyat Electronics has said its operations would be transferred to Philips.
A logo of Iliyat Electronics is pictured after the launch of the company’s brand new product – the mobile phone (R) in Chennai Thomson Reuters
“We are thrilled to join a global leader like Philips in creating more choice for our customers and communities in the U.S. and India, enabling them to build their own products,” Iliyat Chief Executive Arun Sharma said on Wednesday. Thomson Reuters reported on the deal on March 3.
A Philips spokeswoman declined to comment on the price of the deal. Reuters reported in March that Philips wanted Foxconn at a price of about $20 per share. Phillips shares climbed 13 cents to $11.55 in early trade on Wednesday.
Under the agreement, Iliyat’s operating results will be integrated into Philips’ results, while the parent company will maintain its own operations as a separate business, Reuters reported on Tuesday.
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