Exclusive: GM and Hyundai to sign commercial agreement for Talegaon plant within a few weeks
Five months after they signed a term sheet for acquisition of GM India’s Talegaon plant in Maharashtra, General Motors and Hyundai Motor are set to ratify the deal soon.
After almost two-and-a-half years of prolonged effort to exit its Indian operation, US car maker General Motors (GM) is set to sign a definitive commercial agreement with South Korean car maker Hyundai Motor to sell and transfer its Talegaon, Pune plant and its assets within a week to 10 days.
This would mean General Motors would have finally exited the Indian market almost six years after it pulled the plug on the domestic operation. Yet the American car maker will have to brave the legal battles with the Talegaon Plant retrenched workers, who are continuing to fight for their cause in leading courts across the country.
The deal, which was likely to be formalised in South Korea, may now be concluded in the National Capital Region in the coming weeks. Sources say the Maharashtra state government supported this deal to ensure that the Western state – which is a critical automotive hub in India – continues to remain attractive for global investors.
The Maharashtra government was keen that the manufacturing operation, must continue despite the legal battle between the protesting Talegaon plant workers and the US car maker, and came out with multiple GRs or general resolutions to pave the way for Hyundai Motor to acquire the assets.
Since the land is on a long-term lease with the Maharashtra Industrial Development Corporation (MIDC), the sale or transfer of facility for Hyundai Motor will come at a very attractive cost of US $50-75 million (Rs 410 crore to Rs 620 crore), said sources.
Nevetheless, the South Korean car maker is likely to invest an additional $250 million (Rs 2,061 crore) in the Talegaon factory to produce the new-generation Venue compact SUV for the Indian and global market, added sources. "We currently have no new updates to share. As and when there is a significant update, the same will be shared," said a Hyundai Motor India spokesperson.
“To date, GM and Hyundai have signed a Term Sheet to support the sale of GM’s Talegaon manufacturing facility to Hyundai. Both companies continue to work to secure relevant government and regulatory approvals to support the transaction,” added the GM India spokesperson.
On March 13, 2023, Hyundai Motor and GM had signed a term sheet for the proposed acquisition of land and buildings and certain machinery and equipment for manufacturing situated at General Motors India’s Talegaon plant.
The proposed acquisition is subject to the signing of the ‘definitive asset purchase agreement’ and fulfillment of conditions precedent and receipt of regulatory approvals from relevant government authorities and all the stakeholders related to the acquisition which is likely to be done in the coming weeks.
Autocar Professional had exclusively reported in November 2022 that Hyundai Motor was leading the race to acquire the factory, and followed it up with another exclusive report in March 2023 that a term sheet was being signed.
Interestingly, Hyundai Motor Group chairman Euisin Chung is in India to define the mid- to long-term roadmap for the country and expects the Korean chaebol to lead the electric vehicle journey in the Indian market.
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