Chinese automaker BYD’s electronics unit, BYD Electronic, has announced its plans to acquire the mobile electronics manufacturing business of US-based manufacturer Jabil Inc in China for 15.8 billion yuan ($2.2 billion). This acquisition is expected to provide BYD Electronic with an expanded customer base, diversified product portfolio, and growth in its smartphone components business.
Jabil Circuit recently established a unit that absorbed its product-manufacturing businesses in Chengdu and Wuxi. These businesses will now be sold to BYD Electronic, allowing Jabil to streamline its portfolio and address the lack of growth in its mobile parts business. Following the announcement, Jabil’s shares rose by 6%, indicating investor optimism regarding the deal. Meanwhile, BYD Electronic’s shares initially fell but later recovered and closed flat.
Analysts predict that this acquisition will also benefit BYD Electronic’s BE unit by further penetrating Apple’s casing supply chain. BYD initially started as a seller of electronic components and later listed its BE unit on the Hong Kong Stock Exchange in 2007.
The financing details of the deal have not been disclosed, but it is expected to be financed through loan and equity issuance. Both parties see this partnership as beneficial to their respective long-term goals. Jabil sees it as an opportunity to enhance its shareholder-centric capital framework and invest further in electric vehicles, renewable energy, healthcare, AI cloud data centers, and other end-markets. On the other hand, BYD Electronic aims to strengthen its position in the market and expand its business operations.
BYD has a history of expanding through strategic acquisitions. The company entered the car industry in 2003 when it acquired Nanjing-based automaker Qin Chuan. This acquisition of Jabil’s mobile electronics manufacturing business is subject to completion and regulatory approval.
Overall, this deal represents a significant opportunity for BYD Electronic to expand its operations and customer base, diversify its product offerings, and strengthen its position in the market. It also allows Jabil to streamline its portfolio and invest in other high-growth industries. Investors and industry experts will closely watch the completion and regulatory approval process to gauge the potential impact of this acquisition on both companies’ future prospects.
