Sanmina-SCI has expanded its business relationship with IBM

Sanmina-SCI, a leading global electronics manufacturing service provider, has expanded its business relationship with IBM by signing an agreement that calls for Sanmina-SCI to provide a range of manufacturing services to IBM in Mexico, North America and Europe.

Monterrey and Guadalajara offices of Baker & McKenzie advised Sanmina-SCI Corp. on the Mexican side of a recent agreement, expected to generate revenue in excess of US$3.6 billion over its term.

Commenting on the transaction, Baker & McKenzie Partner Andres Ochoa-Bünsow said, "This transaction once again demonstrates the trust that global companies have in Mexico, and in the favorable investment environment in the country notwithstanding the intricate times the world is going through these days. This transaction will strengthen Sanmina-SCI's business relationship with IBM and will further enhance Sanmina-SCI's position as one of the leading EMS providers in Mexico and the rest of the world."

The deal, which has provided approximately 1400 jobs as well as the transfer of 400 IBM employees to Guadalajara, Mexico, commenced on January 6, 2003. At that time the parties executed an Asset Purchase Agreement, which was subject to various governmental authorizations. The closing of the transaction took place in Mexico on February 7, 2003 with further approval by the Mexican Competition Commission being granted on March 20, 2003.

Under the terms of the agreement IBM will outsource the manufacturing and assembly of a significant portion of its eServer and xSeries products, IntelliStation workstations and ThinkPad notebooks to Sanmina-SCI in Mexico. In addition, Sanmina-SCI will distribute and fulfill customer orders for a number of peripheral devices for which they have acquired the IBM manufacturing operations assets.

Baker & McKenzie Partners from the Firm's Monterrey and Guadalajara offices Andrés Ochoa-Bünsow, Ricardo Castro-Garza, Edmundo Elías-Fernández, Juan Bernardo García-Garza, and Alfonso Garcia-Lozano led the cross-departmental transaction, supported by associates Bertha Garcia Hernandez, Cynthia Ortega Arredondo, Jose Luis Marin, Fabián Monsalve Agraz and Valeria Chapa Garza.