Tata Motors Ltd yesterday said that its subsidiary, Tata Passenger Electric Mobility Limited (TPEML), will be acquiring Ford India Private Limited (FIPL)’s manufacturing plant at Sanand, Gujarat, at a consideration of Rs725.7 Crore. According to the agreements signed by the two companies, Tata Motors will get the entire land and buildings on the premises, and also the vehicle manufacturing plant along with machinery and equipment. All of Ford’s employees, too, will be transferred to Tata.
This state-of-the-art plant offers a manufacturing capacity of 300,000 units per annum. It can also scale it up to 420,000 units per annum in the future. 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.
Nevertheless, 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 signed an MoU in May to support all relevant approvals for the above transaction.
Shailesh Chandra, Managing Director of TPEML, 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. 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.”
As for FIPL, the company 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. 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.
Meanwhile, Steve Armstrong, Transformation Officer of Ford Motor Company, said, “Today’s 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.”
Also Read: Tata Motors, Ford Motors & Gujarat Govt Sign MoU Over Sanand Plant
