Tata Motors on Monday said its subsidiary and Ford India have inked a pact with the Gujarat government to acquire FIPL's Sanand vehicle manufacturing plant.

Tata Passenger Electric Mobility Ltd (TPEML) -- a subsidiary of Tata Motors -- and Ford India Pvt Ltd (FIPL) have today signed a memorandum of understanding (MOU) with the Gujarat government for the potential acquisition of FIPL's Sanand vehicle manufacturing facility, including land, buildings, vehicle manufacturing plant, machinery and equipment, Tata Motors said in a regulatory filing.

The MoU also includes transfer of all eligible employees of FIPL Sanand's vehicle manufacturing operations, subject to the signing of definitive agreements and receipt of relevant approvals, it added. "Tata Motors has a strong presence in Gujarat for more than a decade with its own manufacturing facility at Sanand. This MoU further reinforces our commitment to the state by creating more employment and business opportunities," Tata Motors Passenger Vehicles Ltd and TPEML MD Shailesh Chandra said.

Rising customer preference for passenger and electric vehicles made by Tata Motors has led to a multi-fold growth for the company over the past few years, he added.

"This potential transaction will support the expansion of capacity, thus securing future growth and opportunity to further strengthen our position in the passenger and electric vehicles space," Chandra said.

The MOU will be followed by the signing of the definitive transaction agreements between TPEML and FIPL over the next few weeks, the auto major stated. TPEML is planning to invest in new machinery and equipment, which  is necessary to commission and make the unit ready to produce its vehicles.