Tata Motors to acquire Iveco in €3.8 billion deal, expanding global CV reach

India Today

5 days ago

In a landmark, Tata Motors has announced the acquisition of Italy's Iveco Group for 3.8 billion in an all-cash transaction. The deal will be executed through a voluntary tender offer made by TML CV Holdings PTE Ltd, a newly formed Dutch-incorporated entity entirely owned by Tata Motors. Upon completion, the combined entity will become one of the world's largest CV manufacturers, generating annual revenues of approximately 22 billion and sales exceeding 540,000 units per year.advertisementThe offer targets all issued common shares of Iveco Group, conditional upon the successful separation of its defence business by March 31, 2026. Shareholders are expected to receive an dividend of 5.5–6.0 per share from the sale of the defence unit, which has been valued at 1.7 billion. The offer price of 14.1 per share (excluding the dividend) represents a 34–41% premium, providing significant value to Iveco's shareholders.The deal has received unanimous approval from Iveco's Board of Directors, who have recommended the offer as being in the best interest of shareholders and stakeholders. Exor N.V., Iveco's largest shareholder with a 27.06% equity stake and 43.11% voting rights, has irrevocably committed to tender its shares and support the transaction. Following the acquisition, Iveco will be delisted from Euronext Milan and will continue to operate as a wholly owned subsidiary of Tata Motors, retaining its headquarters in Turin, Italy, and preserving its brands and industrial footprint.
Strategically, the merger brings together highly complementary businesses with minimal geographic and product overlap. Tata's strong presence in India and Asia will be coupled with Iveco's established operations in Europe and the Americas. The combined entity's revenues will be split roughly 50% from Europe, 35% from India, and 15% from the Americas, along with a growing presence in Asia and Africa. Together, the two companies aim to leverage their strengths in product development, powertrain capabilities, and zero-emission mobility solutions.To ensure operational continuity and employee stability, Tata Motors has committed to a robust set of non-financial covenants, valid for two years post-settlement. These include no job losses or plant closures directly resulting from the merger, preservation of employee rights and benefits, and continued support for Iveco's strategic roadmap and capital expenditure plans. The governance structure will also remain intact, with two independent directors appointed to oversee compliance with the agreed covenants.Tata Motors has secured full financing for the deal from Morgan Stanley and MUFG, ensuring high certainty of completion. Advisors on the transaction include Goldman Sachs (for Iveco), Morgan Stanley (for Tata Motors), and law firms Clifford Chance, De Brauw Blackstone Westbroek, and PedersoliGattai, among others.Natarajan Chandrasekaran, Chairman of Tata Motors, called the acquisition a 'logical next step' after the recent demerger of the CV business, enabling the company to compete globally with dual strategic bases in India and Europe. Iveco Chair Suzanne Heywood echoed this sentiment, emphasising the alignment of the two companies' visions for sustainable mobility and long-term industrial stability.advertisementThe acquisition positions Tata Motors and Iveco Group to lead in the future of commercial mobility, with enhanced scale, a diversified global footprint, and a shared focus on innovation, electrification, and sustainability. Subject to regulatory approvals, the transaction is expected to close by April, 2026.Subscribe to Auto Today Magazine- Ends