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Tata Motors Signs Deal to Acquire Ford India’s Sanand Plant for Rs 726 Crore

Tata Motors shares were up 0.15 per cent at Rs 404.90 on BSE, today.

Tata Motors said its subsidiary had signed an agreement to acquire Ford India’s manufacturing plant in Sanand for Rs 725.7 crore.


Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Ford India Private Limited (FIPL), have signed a Unit Transfer Agreement (UTA) to acquire a factory in Gujarat.


As part of the deal, Tata Motors will acquire the entire land and buildings, a car manufacturing plant and the machinery and equipment therein, the Mumbai-based auto giant said in a statement. The deal also includes the transfer of all eligible employees, it added.


Tata Motors said FIPL would lease back the land and buildings of the powertrain manufacturing plant from TPEML to continue operating its powertrain manufacturing plant on mutually agreed terms. It added that if FIPL ceases such operations, TPEML has agreed to provide employment opportunities for eligible factory employees.

Gujarat government, TPEML and FIPL signed a tripartite memorandum of understanding on 30 May 2022 to support all relevant approvals for the above-mentioned transaction. Tata Motors said the acquisition is timely and a win-win for all stakeholders as its manufacturing capacity is nearing saturation.

The Sanand factory has a manufacturing capacity of 3 lakh units per year, which can be expanded to 4.2 lakh units per year. The automaker said TPEML would make the necessary investments to reconfigure the factory to accommodate Tata Motors’ existing and future vehicle platforms.


It added that the unit is adjacent to the existing manufacturing plant of Sanand Tata Motors Passenger Vehicles Ltd, which will facilitate a smooth transition.


Steve Armstrong, Ford’s transformation officer, said the announcement marks an essential step in restructuring the company’s operations in India.


The company announced last September that it would halt vehicle production at two of its plants in the country as part of a restructuring exercise.


Tata Motors said that TPEML and FIPL would work together in the coming months to meet all prerequisites and obtain the regulatory approvals required to close the transaction.

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