March 30, 2019 / 5:35 PM / 6 months ago

Brazil automaker CAOA signs agreement with Ford over plant purchase: source

The Ford logo is seen at the Ford oldest Brazil plant after company announced its closure in Sao Bernardo do Campo, Brazil February 21, 2019. REUTERS/Amanda Perobelli

SAO PAULO (Reuters) - Brazilian automaker CAOA has signed a confidentiality agreement to negotiate a potential purchase of Ford Motor Co’s plant in the industrial city of Sao Bernardo do Campo, according to a source familiar with the matter.

Ford in February announced it would shut down the plant, its oldest one in the country, amid a global restructuring plan, costing 3,000 jobs.

The announcement triggered a campaign led by Sao Paulo governor Joao Doria to find a buyer for the space.

Reuters reported CAOA’s interest in the factory last month, but at the time there were up to three different companies interested in buying it up.

Ford declined to comment on the confidentiality agreement or whether CAOA had been the one to sign it. CAOA did not immediately respond to a request for comment.

Negotiations are not final, but it is a sign that the two companies are closer to reaching a deal, the source said.

Brazil has long been South America’s automaking hub and has led many brand name global carmakers to set up shop here. But CAOA is the rare company that is actually domestically owned. It currently produces cars for Hyundai and owns a 50 percent stake in China’s Chery operation in Brazil, which led to the rebranding of the cars as CAOA Chery.

It also has a close relationship with Ford as its single largest distributor in Brazil.

Reporting by Marcelo Rochabrun, Editing by Franklin Paul

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