India's Tata Motors to buy core truck business of Italy's Iveco
Tata will launch an all-cash tender offer on Iveco's shares, subject to the defense business sale, at 14.1 euros per share.
Exor, the investment company of Italy's Agnelli family, has agreed to hand its 27% controlling stake in Iveco to Tata.
"The offer would bring together two businesses with highly complementary product portfolios and capabilities and with substantially no overlap in their industrial and geographic footprints," Tata and Iveco said.
The combined group would have a significant global presence, with sales of over 540,000 units per year and revenues of around 22 billion euros.
The Indian manufacturer controls Jaguar Land Rover in the passenger car sector, but has virtually no presence, nor manufacturing footprint, in the European commercial vehicle industry.
Separately Italian state-backed group Leonardo has agreed to buy Iveco's IDV defense unit, giving the business an enterprise value of 1.7 billion euros, the two companies said on Wednesday.
The sale of the defense business cleared the way for Tata's takeover bid for the rest of Iveco.
The defense transaction is expected to be completed in the first quarter of 2026, subject to regulatory approvals, Iveco and Leonardo said in separate statements.
The transaction will be financed through available cash resources, Leonardo said.
It told analysts that Germany's Rheinmetall would acquire the defense trucks part of the Iveco operation in the coming months.
The deal is in line with Leonardo's broader strategy of consolidation in the defense sector and will allow the defense group to address the increasing demand in Europe for land vehicles.
Iveco said that, once the IDV deal is completed, it planned to distribute its net proceeds to shareholders via an extraordinary dividend.
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