Tata Motors buys Ford’s Sanand plant for Rs 725 Cr
Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors and Ford India Private Limited (FIPL), have signed a unit transfer agreement (UTA) for the acquisition of FIPL’s manufacturing plant situated at Sanand, Gujarat including entire land and buildings, vehicle manufacturing plant along with machinery and equipment for a consideration of Rs 725.7 crore.
Ford will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from Tata Motors on mutually agreed terms. Tata Motors has agreed to offer employment to the eligible employees of Ford’s powertrain manufacturing plant in the event of Ford’s cessation of such operations.
The closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and fulfilment of customary condition precedents. The government of Gujarat, TPEML and FIPL have already executed a tripartite MoU on 30th May to support all relevant approvals for the above transaction.
“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders. It will unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum,” a statement issued by Tata Motors said.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, said, “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.”
Steve Armstrong, Transformation Officer of Ford Motor Company said, “With the transfer of employment for eligible vehicle manufacturing employees included in the agreement, this milestone also highlights our best effort in caring for those impacted by the restructuring.”
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.
