Tata Motors' electric vehicle arm Tata Passenger Electric Mobility has acquired a Ford India manufacturing plant situated at Sanand in Gujarat for a total consideration of Rs 725.7 crore.
The deal includes land and buildings, a vehicle manufacturing plant along with machinery and equipment as well as the transfer of all eligible employees of the vehicle manufacturing operations at Sanand, Tata Motors said late Sunday evening in a regulatory filing.
Ford India will, however, continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from the Tata Motors' subsidiary on mutually agreed terms, the stock exchange filing said.
"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 30th May 2022 to support all relevant approvals for the above transaction," it stated.
For Tata Motors, this deal is expected to unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum.
Tata will make the necessary investments to reconfigure the plant to adapt to its needs. The unit is also adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles at Sanand, which should help in a smooth transition.
"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," said Steve Armstrong, Transformation Officer of Ford Motor Company.
Both Tata 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 filing said.
( With inputs from ANI )
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