By XU Shiqi
BYD Electronic (BYDE), the electronics arm of automaker BYD has entered into a preliminary agreement to acquire Jabil Circuit for 15.8 billion yuan (US$ 2.2 billion). The acquisition targets Jabil's manufacturing operations in Chengdu and Wuxi, both key industrial cities in China.
Jabil is a global leader in EMS manufacturing and a prominent supplier for Apple, headquartered in the United States. Jabil Circuit, the mobility division of the corporation, registered revenue of US$3.8 billion (28 billion yuan) during its latest quarter.
The partnership will help BYDE diversify its product portfolio and overall product mix.
Jabil's footprint in China includes factories in Wuxi and Chengdu, both of which became Apple suppliers in 2022. However, these sites have publicly disclosed investments amounting to tens of billions of yuan. The allocation of the remaining capital remains uncertain, raising the possibility of BYDE needing to seek loans or issue additional equity to finalize the acquisition.
The synergy between BYD Electronic and Jabil holds the potential to reshape the landscape of electronics manufacturing, fostering innovation and fortifying BYDE's presence in the industry.
