Tata Motors to acquire Ford's Sanand plant to expand production

New Delhi: Tata Motors has inked a pact to acquire Ford India's Sanand-based manufacturing plant for Rs 725.7 crore, as it aims to bolster its passenger vehicle production capacity.

As part of the deal, Tata Motors will get the entire land and buildings, vehicle manufacturing plant along with machinery and equipment situated therein, the Mumbai-based auto major said in a statement.

The deal also includes the transfer of all eligible employees, it added.

Tata Motors said with its manufacturing capacity nearing saturation, the acquisition is timely and a win-win for all stakeholders.

The Sanand plant has a manufacturing capacity of 3 lakh units per annum, which is scalable to 4.2 lakh units per annum.

Tata Passenger Electric Mobility Ltd (TPEML) will make the necessary investments to reconfigure the plant to adapt to Tata Motors' existing and future vehicle platforms, the automaker said.

The unit is adjacent to the existing manufacturing facility of Tata Motors at Sanand, which should help in a smooth transition, it added.

"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," Tata Motors Passenger Vehicles MD Shailesh Chandra noted.

TPEML, a subsidiary of Tata Motors and Ford India Pvt Ltd (FIPL), have signed a Unit Transfer Agreement (UTA) for the acquisition of the Gujarat-based plant.

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

As part of the arrangement, FIPL will continue to operate its power train manufacturing facility by leasing back the land and buildings of the plant from TPEML on mutually agreed terms, Tata Motors said.

TPEML has agreed to offer employment to eligible employees of the plant in the event of FIPL's cessation of such operations, it 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, Tata Motors said.

Ford Motor Company Transformation Officer Steve Armstrong said the announcement marks an important step forward in the company's ongoing business restructuring in India.

The company in September last year announced that it would stop vehicle production at its two plants in the country as part of a restructuring exercise. Shares of Tata Motors were trading 0.75 per cent up at Rs 468.90 apiece on the BSE.

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