Tata Motors to acquire Ford's Sanand Unit for Rs725.70 crore; stock zooms ~1%

8 Aug 2022 , 09:17 AM

Tata Motors Limited informed that a subsidiary of the company, Tata Passenger Electric Mobility Limited, and Ford India Private Limited executed a Unit Transfer Agreement for the acquisition of FIPL’s manufacturing plant situated at Sanand, Gujarat.

The said acquisition includes entire land & buildings of Ford India, vehicle manufacturing plant and machinery & equipment situated therein, and eligible employees.

The consideration for transfer of ‘Sanand Unit’ is fixed at Rs725.70 crore.

FIPL will continue to operate its Powertrain Manufacturing Facility by leasing back the Powertrain Manufacturing Plant’s land and buildings from TPEML on mutually agreed terms.

The transaction will be completed subject to the receipt of necessary government approvals and the fulfillment of customary condition precedents.

Tata Motors has agreed to backstop specific identified performance and financial obligations of TPEML as part of the Transaction.

Tata Motors’ Passenger Vehicles division has outperformed the market in recent years. It has strong plans to maintain this momentum with a robust pipeline of future-ready “New Forever” products and proactive investments in electric vehicles.

With the company’s manufacturing capacity near saturation, this acquisition is both timely and beneficial to all stakeholders. It will unlock a cutting-edge manufacturing capacity of 300,000 units per year, scalable to 420,000 units per year.

At around 9.21 AM, Tata Motors was trading at Rs468.60, up by 0.69% from its previous closing of Rs465.40 on the BSE.