In a fresh development, the domestic automaker Tata Motors has signed an agreement with Ford India to buy its manufacturing plant situated in Gujarat, along with all of its assets and employees.
Last year, the American multinational automobile manufacturer Ford had exited the Indian market, giving rise to a havoc in the Indian auto industry, leaving an air of confusion and chaos not just amid the customers of the carmaker but also among various auto-dealer groups.
Now, Tata Motors’ wholly-owned subsidiary Tata Passenger Electric Mobility or TPEML has acquired Ford India’s Gujarat manufacturing unit for a consideration of Rs 725.7 crore.
Tata Motors Buys Out Ford India’s Sanand Unit
After Ford quitted the Indian auto market in Q2 2021, its customers and auto-dealer groups were left perplexed on the sudden exit of the US automaker.
Tata Group’s Tata Motors announced in a late exchange filing on Sunday that it has signed a Unit Transfer Agreement with Ford India to acquire the latter’s manufacturing plant based in Sanand, Gujarat.
As per the agreement, Tata Passenger Electric Mobility will acquire the land & buildings, vehicle manufacturing plant along with machinery and equipments, along with all the eligible employees of Ford India’s vehicle manufacturing operations at Sanand.
The total consideration, excluding taxes, of this agreement amounts to Rs 725.7 crore.
The Tata company has agreed to retain all the eligible employees of Ford India’s Sanand manufacturing unit and offer them employment in the event of FIPL’s cessation of operations.
The exchange filing read, “The closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and fulfilment of customary condition precedents.”
To support all the relevant approvals of the aforementioned transaction, TPEML, Ford India and the Gujarat government have already executed a tripartite MoU on May 30, 2022.
“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,” said TPEML’s MD, Shailesh Chandra.
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