Hyundai Planning To Acquire General Motors' Talegaon Plant, Signs Term Sheet
- Hyundai takes first step towards potential acquisition
- New plant would become Hyundai's third production facility in India
- Companies still to finalise an asset purchase agreement
Hyundai Motor India has taken the first step towards the potential acquisition of General Motor’s Talegaon production facility in Maharashtra. The company has signed a term sheet for the potential acquisition of certain “identified assets” at the facility.
In a statement, Hyundai said that the potential acquisition would be subject “to the signing of the ‘Definitive Asset Purchase Agreement’ and fulfillment of conditions precedent and receipt of regulatory approvals from relevant Government Authorities.”
The new plant will help Hyundai boost its production capacity in India with the firm’s current two facilities operating at full capacity.
Post the acquisition Hyundai could move some of its model production to the new facility.
General Motors wound down operations at its Talegaon plant in 2020 while its sales operations were halted in 2017 in India. The plant had been subject to a takeover bid from Chinese firm Great Wall Motors (GWM) in 2020 with both companies signing an agreement for purchase. The sale of the plant was initially expected to have been completed by the end of 2020 though the term sheet was extended twice due to the delays in getting the central government's approval for foreign direct investment. The renewed term sheet expired in June 2022 with GWM opting to cancel plans for an India entry.
General Motors while having officially stopped production in 2020 has also been involved in a long legal dispute with its worker's union at the Talegaon Plant over severance. The workers union has been demanding the continuation of employment at the Talegaon plant under the new owner – a demand GM India has not met. The matter has been part of ongoing legal proceedings since 2021.