Jabil to sell mobility business for $2.2B

St. Petersburg-based tech giant Jabil, the largest publicly traded company in the Tampa Bay region, has agreed to sell its mobility business in China to BYD Electronic for $2.2 billion.

Singapore-based Jabil Circuit, which manufactures printed circuit boards, established a unit this month that absorbed its product-manufacturing businesses in Chengdu and Wuxi, which will now be sold to the Chinese company, according to Reuters. 

“This transformational deal would represent the largest transaction in the history of our company, and I am thrilled to be able to work with a reputable company like BYDE to drive this business successfully forward,” Jabil CEO Kenny Wilson said in a statement. 

BYD Electronic is a subsidiary of Chinese automaker BYD. The BYD Electronic group is known for its work in the electric vehicle industry and assembling parts for smartphones, including Apple, tablets and other devices. 

“If completed, the proceeds from this transaction will enable us to enhance our shareholder-centric capital framework, including incremental share buybacks. Additionally, it will provide opportunities for further investment in electric vehicles, renewable energy, healthcare, AI cloud data centers, and other end-markets,” Wilson said. 

Following this week’s news of the planned agreement, Jabil’s shares jumped over 7% in early trading on Monday. The deal equates to 15% of Jabil’s entire market cap. 

“This acquisition will expand the business of smartphone components and mark the beginning of a new cycle of rapid growth. The acquisition will also ensure long-term sustainable development while creating value for customers and shareholders of the BYD Electronics,” Wang Nianqiang, CEO of BYD Electronic, said in a statement. 

The deal will not be completed until the parties have completed due diligence, executed the agreement and closed the transaction, which will be subject to the satisfaction of required regulatory approvals and other customary closing conditions, according to Jabil. 

According to the latest earnings report, Jabil had a net revenue of $8.5 billion in the third quarter. Wilson said in this fiscal year, the company is projecting to deliver $8.50 in core earnings per share on $34.7 billion in revenue.