Flextronics

(FLEX) - Get Report

said Tuesday that it will purchase two Casio Computer plants for an undisclosed amount, and the two companies will enter into an outsourcing relationship worth about $1.5 billion to Flextronics.

Operational services provider Flextronics will purchase a Casio production facility in Malaysia, as well as Casio's manufacturing operations in Aichi, Japan, excluding the land and building. The Japanese facility will function as Flextronics' site for repair, logistics and distribution services. Production in the plants is expected to be transferred by late July.

Additionally, the two companies have entered a contract manufacturing agreement for Singapore-based Flextronics to manufacture a variety of Casio electronic products.

The deal is expected to allow Casio to cut costs as part of its restructuring plan as profits at the electronics company continue to shrink.

Shares of Flextronics were up 6.5% to $15 on the news in premarket trading after closing at $14.09 Monday.