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Tata Motors acquire Ford India's Sanand plant for Rs 725.7 crore

Kenneth John Published: August 08, 2022, 10:08 AM IST

Ford India (FIPL) and Tata Passenger Electric Mobility (TPEML) have signed a Unit Transfer Agreement (UTA) for the purchase of FIPL's manufacturing facility in Sanand, Gujarat. The cost of the arrangement is estimated to be Rs 725.7 crore.

According to the terms of the deal, TPEML will assume ownership of the whole plot of land and all structures on it, the vehicle manufacturing facility's machinery and equipment, as well as the transfer of all FIPL's qualified workers who work at its Sanand vehicle manufacturing activities. Ford India will, however, under mutually agreed-upon terms, lease back the land and structures under the powertrain production plant. In the event that FIPL ceases such activities, TPEML has promised to give employment to the qualified workers at this factory.

The acquisition will only be finalized if all necessary government clearances have been obtained and customary preconditions have been met. On May 30, 2022, the Gujarat government, TPEML, and FIPL already signed a tripartite memorandum of understanding (MoU) to support the necessary clearances for the aforementioned transaction.

With the acquisition, Tata Motors would have access to a 3 lakh unit per year manufacturing capacity that may be increased to 4.20 lakh units per year. TPEML would undertake the necessary expenditures to modify the factory to accommodate the current and next car platforms from Tata Motors. The plant is also close to Tata Motors Passenger Vehicles' current Sanand manufacturing location.

Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, 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".

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