Tata Motors to acquire Ford India’s Sanand plant for Rs 725.70 crore

Mumbai, August 8, 2022

Tata Motors said on Sunday it would acquire Ford India's manufacturing plant at Sanand in Gujarat for a total consideration, exclusive of taxes, of Rs 725.70 crore.

A press release from Tata Motors said its subsidiary, Tata Passenger Electric Mobility Limited (TPEML) and Ford India Private Limited (FIPL) had on Sunday signed a Unit Transfer Agreement (UTA) for the acquisition of the plant.

The acquisition will include inter-alia entire land & buildings; Vehicle Manufacturing Plant along with machinery and equipment situated therein; and transfer of all eligible employees of FIPL’s vehicle manufacturing operations at Sanand.

The release said FIPL would 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 FIPL’s Powertrain Manufacturing Plant in the event of FIPL’s cessation of such operations, it said.

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 release said.

The government of Gujarat, TPEML and FIPL have already executed a tripartite MoU on May 30, 2022 to support all relevant approvals for the above transaction.

"Tata Motors Passenger Vehicles business has delivered market beating growth over the last few years and has strong plans to sustain this momentum, with its robust pipeline of future ready 'New Forever' products and proactive investments in electric vehicles. With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders. 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," the release said.

The release said 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 Passenger Vehicles Limited at Sanand, which should help in a smooth transition.

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.

“The shared values of trust, ethics and putting people first were the driving force behind our agreement with Tata Motors. We are confident that both the state-of-the-art manufacturing set-up as well as the world-class talent will continue to prosper under the new leadership and help Tata Motors to scale new heights,” Armstrong added.

"Both 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," the release added.

NNN