On August 28, BYD Electronics announced that it had signed a framework agreement with Jabil Circuit (Singapore) Pte Ltd, intending to purchase 100% of its shares for approximately 158 billion yuan. This acquisition primarily involves the manufacturing operations located in Chengdu and Wuxi, including the component manufacturing business for existing clients. This activity is currently managed by the seller and its affiliated companies. BYD stated that this acquisition aims to expand its client base and diversify its smartphone component business, significantly improving the structure of its clientele and products.
According to the announcement, Jabil Circuit is a privately registered company in Singapore and is a subsidiary of Jabil, referred to as the "Jabil Group". Reuters reported earlier this month that Jabil Circuit had consolidated its manufacturing operations in Chengdu and Wuxi under a new department.
The Jabil Group ranks among the top ten global EMS (Electronic Manufacturing Services) providers. On the same day, the group revealed more details, announcing plans to sell its mobile electronics manufacturing business. According to its latest Q3 2023 report, the group's mobile operations generated revenues of $3.8 billion (approximately 277 billion yuan). The CEO of Jabil Group mentioned that this transformative deal would be the largest in their company's history, expressing excitement about collaborating with a reputable company like BYD to drive the business forward.
Jabil Group is listed as a supplier in Apple's 2022 fiscal year supplier list, which covers 98% of its direct suppliers. The listed primary production locations in mainland China include Sichuan, Jiangsu, Guangdong, and Hebei. This suggests that Jabil Circuit, which is being acquired by BYD Electronics, might supply products to Apple.
Headquartered in the US, Jabil Group is publicly traded on the NYSE. The group employs over 250,000 individuals across 100 locations in 30 countries. Their main services range from electronic manufacturing to design engineering, manufacturing, and supply chain services for the consumer industry. They are particularly renowned for producing Apple product casings.
According to Jabil's official website, its Chengdu factory, one of its largest in China, was established in 2012 and began operations in 2014. The products range across networking, wearables, and mobile markets. Reports reveal that Jabil expanded its capacity in Chengdu in 2020 and, in early August 2023, signed agreements for two major projects in the city: an Asian R&D center and an expansion of its Chongzhou manufacturing base, both with investments in the billions.
In 2004, Jabil started its operations in Wuxi. The current facilities offer services like printed circuit board assembly, boxing, order configuration, and automated manufacturing systems. In 2007, Jabil acquired Green Point Technology, a Taiwanese mobile phone manufacturer, and combined the operations under "Jabil Green Point" located in Wuxi. In April 2022, Jabil Green Point announced an investment of 10 billion yuan to establish an AI intelligent terminal module R&D manufacturing base in Wuxi's High-tech Zone.
Given the recent heavy investments announced by Jabil's Chengdu and Wuxi factories, it remains uncertain if future funding will fall upon BYD Electronics. However, Citibank analysts told Reuters that BYD Electronics might need loans and equity issuance to finance this acquisition.
As of press time, neither BYD Electronics nor Jabil Group has provided additional comments on the matter.
