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Tata Motors signs Definitive Agreement for the acquisition of Ford India’s Sanand plant Tata Motors | Ford

Tata Motors signs Definitive Agreement for the acquisition of Ford India’s Sanand plant

India Blooms News Service | @indiablooms | 08 Aug 2022, 01:27 am

Mumbai: Tata Motors subsidiary Tata Passenger Electric Mobility Ltd (TPEML) and Ford India Pvt Ltd (FIPL) Sunday signed a Unit Transfer Agreement (UTA) for the acquisition of the latter's manufacturing plant situated at Sanand, Gujarat for Rs 725.7 crore, an official release said.

The acquisition by TPEML includes the entire land and buildings as well as the vehicle manufacturing plant along with machinery and equipment.

With the takeover, all eligible employees of FIPL vehicle manufacturing operations at Sanand will be also transferred to Tata Passenger Electric Mobility.

FIPL will continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from TPEML on mutually agreed terms, the release said.

TPEML has agreed to offer employment to the eligible employees of FIPL’s Powertrain Manufacturing Plant in the event of FIPL’s cessation of such operations, it added.

The closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and fulfillment of customary condition precedents.

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.

Describing the acquisition as "timely and a win-win for all stakeholders", the company said its manufacturing capacity was nearing saturation.

The new unit will add a manufacturing capacity of 300,000 units per annum, scalable to 420,000 units per annum.

TPEML would make the necessary investments to reconfigure the plant to adapt to Tata Motors' existing and future vehicle platforms.

The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Limited at Sanand, which should help in a smooth transition.

Tata Motors Passenger Vehicles Ltd & TPEML MD Shailesh Chandra said, “The agreement with FIPL is beneficial to all stakeholders and reflects our strong aspiration to further strengthen our market position in the Passenger Vehicles segment and to continue to build on its leadership position in the EV segment. It will accelerate the growth and development of the Indian auto industry by taking a progressive step forward towards building a future ready Atmanirbhar Bharat”.

Ford Motor Company's Transformation Officer Steve Armstrong said, “The announcement marks an important step forward in Ford’s ongoing business restructuring in India, which is part of our Ford+ plan for strategic transformation. 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, the release said.