Tata Group To Acquire Taiwan Firm Pegatron's iPhone operations

Tata Group may reach an agreement to take ownership of Pegatron Corp.'s iPhone manufacturing operations in India as early as May, solidifying Apple Inc.'s ties with one of the nations's most powerful corporations.

The company is nearing the end of talks with Pegatron to acquire a majority share in the Taiwanese company's Apple handset manufacturing operations in India, according to persons with knowledge of the situation. These include one now under construction and one in the southern Indian state of Tamil Nadu, close to Chennai, where iPhones are produced.

Following the acquisition, Pegatron is likely to provide Tata with manufacturing expertise, according to the people, who asked not to be identified because the information is confidential. Tata Electronics Ltd. would take over Pegatron's activities once the transaction is completed. 

The partnership comes as Apple accelerates its efforts to increase output in India, supported by financial incentives granted by Prime Minister Narendra Modi's government, while diversifying its supply chain away from China to reduce geopolitical concerns.

In an effort to encourage major Apple suppliers like Taiwan's Foxconn Technology Group and Pegatron to increase manufacture in India, Modi, who is running for a third five-year term, has provided production-linked subsidies.

Tata Group originally became an iPhone assembler by purchasing an iPhone facility from Taiwan's Wistron Corp. in the nearby state of Karnataka. It also intends to develop a new iPhone manufacturing facility to deepen its collaboration with Apple.