Tata Motors to acquire Italian truck maker Iveco in Rs 38,240-cr deal

New Delhi: Tata Motors on Wednesday said it will acquire Italian commercial vehicle maker Iveco Group, excluding its defence business, for euro 3.8 billion (nearly Rs 38,240 crore) in a deal which is set to be the Indian automaker's biggest buyout.

In the automotive space, the company's largest acquisition till date is its buyout of British brand Jaguar Land Rover for $2.3 billion in 2008.

The executive committee of the company's board has approved the acquisition of 100 per cent common shares of Iveco Group NV, through all cash voluntary tender offer (excluding defence business), subject to all regulatory, statutory and all other necessary approvals, the Mumbai-based auto major said in a regulatory statement.

Tata Motors and Iveco group said they have "reached an agreement to create a commercial vehicles group with the reach, product portfolio and industrial capability to be a global champion in this dynamic sector".

The transaction seeks to acquire 271,215,400 common shares, through a voluntary tender offer, which is subject to a minimum acceptance level of 80 per cent of the shares tendered, it added.

A cash consideration of euro 14.1 per tendered share is proposed for Iveco Group N.V. (excluding the defence business), the company stated.

The offer represents a total consideration of around euro 3.8 billion for Iveco Group, excluding Iveco's defence business and the net proceeds from the defence business separation, it said.

Transaction is expected to close by April 2026, subject to all necessary formalities and regulatory clearances, the company stated.

Commenting on the transaction, Tata Motors Chairman Natarajan Chandrasekaran said, "This is a logical next step following the demerger of the Tata Motors Commercial Vehicle business and will allow the combined group to compete on a truly global basis with two strategic home markets in India and Europe." The combined group's complementary businesses and greater reach will enhance Tata Motors' ability to invest boldly, he said, adding, "I look forward to securing the necessary approvals and concluding the transaction in the coming months".

Suzanne Heywood, Chair of Iveco Group, said: "We are proud to announce this strategically significant combination, which brings together two businesses with a shared vision for sustainable mobility." "Moreover, the reinforced prospects of the new combination are strongly positive in terms of the security of employment and the industrial footprint of Iveco Group as a whole," she added.

Tata Motors' offer would bring together two businesses with highly complementary product portfolios and capabilities and with substantially no overlap in their industrial and geographic footprints, creating a stronger, more diversified entity with a significant global presence and sales of over 5,40,000 units per year.

Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of around 22 billion euros (over Rs 2,20,000 crore) split across Europe (50 per cent), India (35 per cent) and the Americas (15 per cent) with attractive positions in emerging markets in Asia and Africa, the filing said.

"The combined group will be better positioned to invest in and deliver innovative, sustainable mobility solutions by leveraging both supplier networks to serve customers globally. It will also unlock superior growth opportunities and create significant value for all stakeholders in a dynamic marketplace," it said, adding by preserving each group's industrial footprint and employee communities, this complementarity is also expected to foster a smooth and successful integration process.

Tata Motors Executive Director Girish Wagh said the combination is a strategic leap forward in the group's ambition to build a future-ready commercial vehicle ecosystem.

"This partnership not only enhances our ability to serve diverse mobility needs across markets, but also reinforces our commitment to delivering sustainable transport solutions that are aligned with global megatrends," he added.

Iveco Group CEO Olof Persson said: "By joining forces with Tata Motors, we are unlocking new potential to further enhance our industrial capabilities, accelerate innovation in zero-emission transport, and expand our reach in key global markets.

"This combination will allow us to better serve customers with a broader, more advanced product portfolio and deliver long-term value to all stakeholders," he added.

Under their agreement, Iveco Group Board recommended Tata Motors' all-cash voluntary tender offer for Iveco Group common shares and the completion of the offer is conditional on the separation of Iveco Group's defence business.

As per the regulatory filing, Tata Motors' offer will be made by TML CV Holdings PTE LTD or a new limited liability company to be incorporated under Dutch law, which will be wholly owned, directly or indirectly, by the company.

Iveco Group N.V. is a Dutch public limited company incorporated on June 16, 2021, headquartered in Turin, Italy.

The Group designs, manufactures, and sells trucks, commercial and defence vehicles, buses, and powertrains and also provides financial services to its dealers and customers.

The transaction intends to acquire the non-defence business comprising trucks, buses, powertrains and financial services.

Tata Motors' acquisition of Iveco Group is the second biggest acquisition of the Tata Gropu after the $12 billion takeover of Anglo-Dutch giant Corus Group Plc in 2007.