Ford Otosan, the joint venture with Turkey’s largest conglomerate Koc Holding will buy the U.S. automotive giant’s Craiova plant in southern Romania for 575 million euros ($630 million).
“According to the contract, 356 million euros will be paid in 2022, 196 million euros including interest will be paid in June 2025 and 23 million euros will be paid, including interest, in December 2028. Depending on the capacity utilization rate foreseen for 2034, an additional payment of up to 140 million euros may also be made,” the statement made by Ford Otosan to the Public Disclosure Platform (KAP) Monday (March 14) said.
Under the proposed new ownership structure, Craiova’s plant would benefit from a wide skills network and knowledge transfer through Ford Otosan’s extensive experience in designing, engineering and building commercial and electric vehicles,
Ford assures that the transfer of ownership doesn’t impact its plans in Romania and that the Craiova plant will play a major role in the group’s business in Europe while supporting its electrification plans (Model e) and commercial vehicles (Ford Pro).
“This transfer shows how Ford leverages its strategic partnerships to make the most efficient use of existing resources through joint investment, while benefiting from Ford Otosan’s extensive experience. We welcome this opportunity to strengthen our partnership with Koç Holdings through Ford Otosan and to develop this joint venture together,” Ford Europe president Stuart Rowley said.
With the acquisition of the Craiova plant, the total annual production capacity of Ford Otosan is expected to exceed 900,000 while the number of employees is expected to exceed 20,000.
According to the agreement, sales and distribution business activities within Ford Romania will be transferred to a subsidiary of FMC, and Craiova facilities and production activities, operating with a production capacity of 250,000 vehicles and 365,000 engines, will be taken over.
Ford also announced that the Puma passenger car model will receive a fully electric version from 2024, which will be manufactured at the Craiova plant. The production of the Ford EcoSport small class SUV will end by the end of 2022, as the Craiova plant will focus more and more on on the production of commercial and electric vehicles.
In addition, a compact multifunctional vehicle, Tourneo Courier, will also be produced in Craiova in 2023, with a fully electric version to be launched in production in 2024.
The transaction is expected to be finalized in the third quarter of 2022 subject to approvals by the regulatory authorities.
Ford Otosan shares closed up 9.96% to 268.20 liras in Istanbul on Monday (March 14).