Hyundai Moves Closer to Acquiring GM’s Talegaon Plant with Signed Term Sheet
Prepend to the content
- GM’s Talegaon plant in India ceased production in 2020.
- Hyundai signs term sheet to acquire the plant.
- Legal dispute ongoing between GM and Talegaon workers’ union.
A potential acquisition of General Motor’s Talegaon production facility in Maharashtra by Hyundai Motor India has taken its first step. While Hyundai has signed a term sheet for acquiring certain assets at the facility, additional information regarding the deal is yet to be disclosed.
However, the acquisition is subject to the fulfilment of certain conditions precedent and receipt of regulatory approvals from relevant Government Authorities. Hyundai has stated that the final agreement will be the “Definitive Asset Purchase Agreement.”
Hyundai’s current production capacity in India is at total capacity, and the new plant will help boost production.
In 2020, General Motors shut down its Talegaon plant and ceased sales operations in India in 2017. Chinese company Great Wall Motors (GWM) offered to acquire the plant, and both parties agreed on a purchase agreement.
However, the sale was delayed due to the need for approval from the Indian government for foreign direct investment, resulting in two extensions of the term sheet. Despite efforts to complete the deal by the end of 2020, it was not finalized, and the renewed term sheet expired in June 2022. Consequently, GWM decided to cancel its plans to enter the Indian market.
General Motors’ Talegaon plant in India ceased production in 2020, but a dispute with its workers’ union over severance has continued. The union has demanded that the employees be offered continued employment at the plant under the new owner, which GM India has refused to comply with. This disagreement has led to a prolonged legal battle between the two parties, with the issue being subject to ongoing legal proceedings since 2021.
“The preliminary study is done. Hyundai wants to acquire the factory and is keenly waiting for workers’ issues to settle. The company wants to diversify its manufacturing footprint, and this plant is right in the hub of the automotive cluster. It is close to the port as well, which satisfies their requirement to purchase the factory. The final signing will be subject to legal clearances only,” Autocar quoted a source.
The post Hyundai Moves Closer to Acquiring GM’s Talegaon Plant with Signed Term Sheet appeared first on Pricebaba.com Daily.