 "CG Power")
Murugappa Group entity CG Power and Industrial on Thursday announced teaming up with Renesas Electronics America and Stars Microelectronics (Thailand) to set up an outsourced semiconductor assembly and testing (OSAT) facility in India.
As a part of the joint venture (JV), CG Power and Industrial has signed agreements on Technology and Services, and offtake and manufacturing agreement with Renesas Electronics Corporation, Japan, according to the filing.
It has also signed a technology know-how sharing and technical support agreement with Stars.
As part of the agreement, CG, Renesas, and Stars will invest $205 million, $15 million, and $2 million respectively. The JV company will have an equity stake of approximately 92.34 per cent, 6.76 per cent, and 0.90 per cent of CG, Renesas, and Stars respectively.
Further, it added that the closure of the JV investments will be completed only after satisfactory completion of the conditions in the agreement, and getting necessary approvals from the relevant government agencies.
“The closing of the Proposed Project Transaction is also subject to satisfactory completion of the conditions precedents as contained in the Joint Venture Agreement,” said the company.
“Congratulations on this newest Joint Venture that will invest in the fast expanding Indian Semiconductor Ecosystem - Welcome,” said Union Minister of State Rajeev Chandrasekhar in a post on [platform name].
The announcement of the joint venture is subject to necessary regulatory and statutory approvals, including approval of the Ministry of Electronics and Information Technology (MeitY), Government of India, and subsidy from central and state governments, said the company in a filing with the Bombay Stock Exchange (BSE).
In November last year, the company had announced applying to the government to set up an OSAT unit with an investment of around $791 million spread over five years and said that it was looking for global partners.
Established in 1937, the Murugappa Group entity has manufacturing facilities in nine countries across Asia, Europe, and North America, with a product portfolio across electrical, industrial, and consumer segments.
