Tata Motors is set to purchase Italian commercial vehicle manufacturer Iveco Group for a sum of €3.8 billion (over Rs 38,098 crore). Following the €9.23 billion Corus deal in 2007, the Iveco acquisition marks Tata Group’s second-largest ever, and the biggest to date for Tata Motors.
- Tata to pay €14.1 per Iveco share, totalling to €3.8 billion
- Iveco will sell off its defence division as a requisite for the Tata deal
- Tata-Iveco is expected to bring in annual revenues of €22 billion (Rs 2.2 lakh crore)
Tata Iveco acquisition details
Tata paying 34-41 percent premium for each Iveco share
Tata will offer €14.1 per share (cum dividend), adjusted to exclude an expected €5.5-6 per share dividend from the divestment of Iveco’s defence business. This represents a 34-41 percent premium over the adjusted share price.
Iveco to shed defence business by end of FY2026
Iveco will sell its defence division for €1.7 billion to Italian aerospace company Leonardo S.p.A before March 31, 2026 – a key condition for the Tata buyout to go through – and regulatory approvals under EU merger laws, foreign investment rules, and Italy’s Golden Power policy will also be required. The Golden Power policy allows the Italian government to oversee and potentially block or impose conditions on direct investments from foreign companies in sectors pertaining to national interests, like defense, energy, transportation, and more.
The Tata deal will be executed through a voluntary tender offer for all common shares of Iveco Group, excluding its defence business. The offer will be made via a Dutch-based special purpose entity fully owned by Tata Motors. The Tata deal has received unanimous approval from the Iveco board. Iveco’s majority shareholder, Exor N.V., which holds 27.1 percent of equity and 43.1 percent voting rights, has agreed to tender its shares.
Iveco and Tata to form strong commercial vehicle business
Once the acquisition is completed, Iveco will be delisted from Italian stock exchange Euronext Milan and become a wholly owned subsidiary of Tata Motors. The commercial vehicle maker will retain its headquarters in Turin, along with its brands and manufacturing operations across Europe.
Combined sales of 540,000 units
The combined Tata-Iveco entity will have annual revenues of €22 billion (approximately Rs 2.2 lakh crore) and sales of over 540,000 units. Their revenue split is projected to be 50 percent from Europe, 35 percent from India, and 15 percent from the Americas.
WITH INPUTS FROM KETAN THAKKAR
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