Tatas sign definitive agreement to acquire Ford India’s Sanand plant for Rs 725 crore

Tata Passenger Electric Mobility (TPEML), a subsidiary of Tata Motors  and Ford India have signed the Unit Transfer Agreement (UTA) for the acquisition of Ford India’s  manufacturing plant situated at Sanand, Gujarat, which inter-alia includes the entire land and buildings, vehicle manufacturing plant along with machinery and equipment situated therein and transfer of all eligible employees of Ford India’s vehicle manufacturing operations at Sanand, for a total consideration, exclusive of taxes, of Rs 725.7 crore.

Ford India 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 Ford India’s Powertrain Manufacturing Plant in the event of Ford India’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 30 May 2022 to support all relevant approvals for the above transaction.

In a press note, Tata Motors said that with its manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders. It plans to  unlock the unit’s manufacturing capacity of 300,000 units per annum which is 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’ PV plant at Sanand, which once rolled out the Nano.

Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility Limited, said, “The agreement with Ford India 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.”

“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,” said Steve Armstrong, Transformation Officer of Ford Motor Company.

Both TPEML 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, the press note said.

Ford’s plant at Maraimalianagar has since closed with the last EcoSport rolling out on 20 July. It remains to be seen who finally acquires the plant and offer a lifeline to workers who were on the agitation path for most of June. There were reports suggesting that Foxconn was keen to acquire the plant to make EVs which has been denied.