Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors, has taken the next step in acquiring the Sanand facility of Ford India Private Limited (FIPL) for a total consideration of INR 725.7 crore exclusive of taxes.
On Sunday, the company announced that it signed a Unit Transfer Agreement (UTA) with FIPL to acquire the latter’s 350-acre manufacturing plant, including the engine plant that stands on 110 acres. The facility includes entire land & buildings, vehicle manufacturing plant along with machinery and equipment, transfer of all eligible employees of FIPL’s vehicle manufacturing operations, among others.
A communication from Tata Motors said it will make the necessary investments to reconfigure the plant to adapt to its existing and future vehicle platforms. As FIPL’s facility is adjacent to the existing manufacturing plant of Tata Motors Passenger Vehicles Limited, it is expected to help in a smooth transition. The acquisition will support its market-beating growth over the last few years besides augmenting its plans to sustain this momentum with its robust pipeline of future-ready 'New Forever' products and proactive investments in electric vehicles. ,
Moreover, this acquisition is timely and a win-win for all stakeholders, with its manufacturing capacity nearing saturation. 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.
According to the agreement, FIPL will continue to operate its powertrain manufacturing facility by leasing back the land and buildings from TPEML on mutually agreed terms. TPEML has also agreed to offer employment to the eligible employees of FIPL’s Powertrain Manufacturing Plant if FIPL ceases such operations.
The transaction closure will be subject to the receipt of relevant approvals from the Government authorities and fulfilment of customary condition precedents. It may be recalled that the Government of Gujarat, TPEML and FIPL have already executed a tripartite MoU on May 20, 2022, to support all relevant approvals for the above transaction.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and 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 PV 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”.
Steve Armstrong, Transformation Officer, 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.”