Tata Motors signs agreement for the acquisition of Ford India’s Sanand plant at INR 725.7 crores

August 8, 2022 2 min read

Tata Passenger Electric Mobility Limited (TPEML) and Ford India Private Limited (FIPL) have signed a Unit Transfer Agreement (UTA) for the acquisition of FIPL’s manufacturing plant situated at Sanand, Gujarat, which inter-alia includes:

(i) entire land & buildings;

(ii) Vehicle Manufacturing Plant along with machinery and equipment situated therein; and

(iii) transfer of all eligible employees of FIPL’s vehicle manufacturing operations at Sanand for a total consideration, exclusive of taxes, of Rs 725.7 Cr.

FIPL will continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from TPEML. TPEML has agreed to offer employment to the eligible employees of FIPL’s Powertrain Manufacturing Plant in the event of FIPL’s cessation of such operations.

The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Limited at Sanand. With TATA Motors’ manufacturing capacity nearing saturation, this acquisition will unlock a manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum.

Announcing this, Mr 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”.

“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. TPEML and FIPL 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.

It should be noted that TATA Motor’s Electric passenger vehicle business has been increasing, led by market leader Nexon EV. The company sold 4,022 electric cars in July 2022, up 566% from July 2021.