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Bigger than Jaguar Land Rover acquisition, Tata Motors to take over Italian auto giant Iveco
Bigger than Jaguar Land Rover acquisition, Tata Motors to take over Italian auto giant Iveco. Image: Reuters
Tata Motors is set to acquire Italian truckmaker Iveco in a $4.5 billion deal from the Agnelli family's holding company, Exor, The Economic Times reported.
If sealed, it would mark the second-largest acquisition in Tata Group's history, behind only its $12.9 billion takeover of Corus in 2007, and the most significant yet for its automotive division. The Indian carmaker had earlier acquired Jaguar Land Rover (JLR) in 2008 for $2.3 billion.
The boards of Tata Motors and Turin-based Iveco are expected to meet Wednesday to approve the transaction, with a formal announcement anticipated the same day.
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Defence, core businesses under separate talks
Iveco on Tuesday confirmed that it is in 'advanced discussions' with multiple parties over two separate deals, one involving its defence business and the other covering its core operations. The company had earlier stated plans to spin off or divest its defence arm by the end of 2025, and has received interest from potential buyers.
Besides trucks, Iveco manufactures buses and engines, and is currently valued at about $4.9 billion. Exor, the investment firm of the Agnelli family, holds a 27.1 per cent stake and 43.1 per cent voting rights in the company.
Tata Motors is reportedly being advised by Morgan Stanley, while Goldman Sachs is representing Exor and Iveco. Legal counsel is being provided by UK-based Clifford Chance. According to ET, Tata Motors plans to route the transaction through a Dutch-based special purpose vehicle (SPV) fully owned by the company.
Negotiations have been underway for six weeks, with both parties now working under an exclusivity agreement that expires on August 1.
National scrutiny likely in Italy
Despite being a recognised commercial vehicle maker in Europe, Iveco is the smallest among the continent's major players, behind Volvo, Daimler, and Traton.
Its frequent presence on M&A watchlists stems from this relative size, although its defence division has often complicated potential deals.
Any major acquisition involving Iveco is likely to come under Italy's 'golden power' regulations, which enable the government to intervene in sales involving companies deemed strategically important to national interest.
Iveco employs around 36,000 people globally, including 14,000 in Italy.
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