Dixon signs 60:40 JV pact with Gemtek

Electronic manufacturing services giant Dixon Technologies India Ltd has formed a joint venture partnership with Gemtek Technology Co to produce optical transceivers and various telecom products within India. This collaboration will be carried out through Dixon Electroconnect Pvt Ltd, which currently operates as a wholly-owned subsidiary of Dixon Technologies.

Following the completion of the deal, Dixon Technologies will own a 60 percent share in the joint venture firm, Dixon Electroconnect, whilst Gemtek will possess the remaining 40 percent. The companies have mutually agreed not to hold any direct equity stakes in one another, as per a regulatory filing.

The joint venture entity will focus on manufacturing and supplying Optical Transceiver - SFP (Small Form-Factor Pluggable) and BOSA (Bidirectional Optical Subassembly), alongside other telecom products in the Indian market. The partnership aims to facilitate Dixon Technologies' entry into the data centre, telecom, and optical-connectivity sectors by merging their extensive manufacturing expertise with Gemtek's proficiency in high-speed optical modules, telecom infrastructure, and networking technologies.

The filing further explains that the joint venture intends to address the rising demand fueled by artificial intelligence (AI), cloud and edge computing, hyperscale data centres, high-speed networking, and next-generation optical communication solutions.

In terms of governance, the joint venture company will have a five-member board, with Dixon Technologies holding the authority to appoint three directors, including the Chairman, whereas Gemtek will appoint two directors. The transaction is projected to be finalized by February.