Tata Motors has signed a pact for acquiring Ford India’s plant in Sanand, Gujarat. The deal has been finalized between the subsidiary of Tata Motors – Tata Passenger Electric Mobility Ltd (TPEML) – which specializes in making electric vehicles and Ford India, which announced the exit from the country some time ago for a sum of Rs 725.7 crore.
As part of the deal, Tata Motors will get entire land and buildings, a vehicle manufacturing plant along with machinery and equipment situated therein, the Mumbai-based auto major said in a statement. The deal also includes the transfer of all eligible employees, it added.
However, Ford India will continue to operate its power train manufacturing facility by leasing back the land and buildings of the power train manufacturing plant from TPEML on mutually agreed terms, Tata Motors said in a statement. The government of Gujarat, TPEML, and FIPL have already executed a tripartite MoU on May 30, 2022, to support all relevant approvals for the above transaction.
Tata Motors, India’s homegrown automaker said with its manufacturing capacity nearing saturation, the acquisition is timely and a win-win for all stakeholders. The Sanand plant has a manufacturing capacity of 3 lakh units per annum which is scalable to 4.2 lakh units per annum. TPEML will make the necessary investments to reconfigure the plant to adapt to Tata Motors’ existing and future vehicle platforms, the automaker said.
The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Limited at Sanand, which should help in a smooth transition, it added. “The agreement with FIPL signed today is beneficial to all stakeholders and reflects Tata Motors’ strong aspiration to further strengthen its market position in the passenger vehicles segment and to continue to build on its leadership position in the electric vehicle segment,” Tata Motors Passenger Vehicles MD Shailesh Chandra noted.
Ford Motor Company Transformation Officer Steve Armstrong said the announcement marks an important step forward in the company’s ongoing business restructuring in India.
The company in September last year announced that it would stop vehicle production at its two plants in the country as part of a restructuring exercise. Both TPEML and FIPL will work together over the next few months to satisfy all the condition precedents and obtain the required regulatory approvals for the closure of the transaction, Tata Motors said.