Deal to be valued at Rs726 cr
BBN Bureau
MUMBAI/August 08-2022: Tata Passenger Electric Mobility Ltd (TPEML), a subsidiary of Tata Motors Ltd, and Ford India Pvt Ltd (FIPL), have signed a Unit Transfer Agreement (UTA) for the acquisition of FIPL’s manufacturing plant situated at Sanand, Gujarat.
The acquisition plan 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.
Deal at Rs726 cr
The deal is for a total consideration of Rs725.7 crore, exclusive of taxes. FIPL will continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from TPEML on mutually agreed term, according to an official statement from Tata Motors.
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 closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and fulfilment of customary condition precedents.
Tripartite agreement
The statement 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,” it added.
“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders,” Tata Motors said.
The deal is expected to unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum.
As per the plans, 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 Ltd at Sanand, which should help in a smooth transition. Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd, said the agreement with FIPL is beneficial to all stakeholders and reflects Tata Motors strong aspiration to further strengthen its market position in the Passenger Vehicles 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,” Chandra said.
