Tata Motors Sunday said its subsidiary Tata Passenger Electric Mobility Ltd (TPEML) has signed a Unit Transfer Agreement (UTA) for the acquisition of Ford India’s manufacturing plant at Sanand in Gujarat for ₹725.7 crore.
As part of the agreement, Tata Motors will get entire land and buildings, vehicle manufacturing plant along with machinery and equipment situated therein, the Mumbai-based auto major said in a late-night notification to the stock exchanges.
As part of the agreement, all the eligible employees at the Sanand unit of Ford India will be transferred to Tata Motors.
Ford India will continue to operate its powertrain manufacturing facility by leasing back the land and buildings of the powertrain manufacturing plant from Tata Passenger Electric Mobility on mutually agreed terms, Tata Motors said.
Tata Motors EV subsidiary also agreed to offer employment to the eligible employees of the powertrain manufacturing plant in case Ford India cessation of such operations, the statement added.
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 2022 to support all relevant approvals for the above transaction.
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 said
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, the auto major 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 said.
Steve Armstrong, Transformation Officer of Ford Motor Company, said the announcement marks an important step forward in the company’s ongoing business restructuring in India, which is part of its 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,” he said.
The company had in September last year announced that it would stop vehicle production at its two plants in India as part of a restructuring exercise.
Both Tata Passenger Electric Mobility and Ford India 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.
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