BYD Subsidiary Acquires Jabil's China Mobility Business for $2.2 Billion
Chinese automaker BYD announced on Monday that its electronics subsidiary has reached an agreement with U.S.-based manufacturer Jabil Inc to acquire its mobility business in China for 15.8 billion yuan ($2.2 billion).
This deal will enable BYD Electronics to expand its customer base, product range, and smartphone components division, aiming to tap into the growth potential within the sector that Jabil presents.
Jabil Circuit, headquartered in Singapore and specializing in printed circuit board manufacturing, established a product manufacturing business unit in Chengdu and Wuxi earlier this month. This unit will now be acquired by the Chinese group.
Shares of BYD Electronic initially fell by up to 9% in Hong Kong on Monday but later recovered, rising 1.4% by the midday break. The Hong Kong-listed stock of BYD's parent company, BYD, increased by 2.2%.
While BYD is now most recognized for its electric vehicle business, it initially began by selling electronic components.
In 2007, BYD's electronic components unit was listed on the Hong Kong Stock Exchange.
The primary focus of BYD's electronic components business has been selling components for consumer electronics products like smartphones and laptops. This segment accounted for over 70% of BYD Electronic's total revenue in 2022. Tu Le, founder of Sino Auto Insights, noted, "For BYD, I think it's a reminder that they do more than just dominate in EVs." He highlighted their position higher up in the mobile supply chain as a significant supplier.
BYD commented in an exchange filing, "While improving [the subsidiary's] market share of products, the acquisition will effectively synergize with [its] existing products, enhance the overall competitiveness, ensure long-term sustainable development." However, specific details about the acquisition were not disclosed.
Jabil, in a statement, stated that if the deal goes through, the definitive agreement would enable the company to "enhance our shareholder-centric capital framework, including incremental share buybacks," according to chief executive Kenny Wilson.
This deal will allow Jabil to allocate further investments into "electric vehicles, renewable energy, healthcare, AI cloud data centers, and other end-markets," Wilson added.
Jabil Circuit collaborates with companies in healthcare, telecommunications, computing, and storage to drive supply chain intelligence, as highlighted on its website.
BYD first entered the automotive industry in 2003 with the acquisition of Nanjing-based automaker Qin Chuan, which possessed a car manufacturing permit. The company introduced its first car model three years later.