Singapore-based ST Engineering’s electronics unit, ST Electronics and Japan’s NEC Corporation (NEC) have entered into an agreement to form a joint venture (JV) in order to collaborate in developing information communication technologies (ICT) initiatives.
ST Electronics subsidiary, ST Electronics Info-Software Systems and NEC Asia Pacific (NEC APAC) will establish the JV, NEC STEE Cloud Services, with an initial investment of S$6m ($5m).
NEC APAC will own a 60% stake in the combined company, while ST Electronics will hold the remaining stake.
NEC STEE Cloud Services will set up a Cloud Oriented Data Centre (CODC) to deliver software as a service (SaaS) to both public and private institutions in Singapore, and subsequently to other Southeast Asian countries.
Both the partners also aim to explore other areas of collaboration for products, technologies and services and intend to benefit existing customers from their new cloud business model.
NEC notes the collaboration will benefit both companies in expanding their territories and enable customers with lower operating costs by outsourcing their requirements to NEC STEE Cloud Services.
The deal will also expand NEC’s global footprint for cloud business, with Singapore, being the Asia Pacific regional headquarters for NEC, being an ideal location to commence this cloud business.
ST Electronics expects that the joint venture will not have any material impact on the consolidated net tangible assets per share and earnings per share of the company for the current financial year.
