Europe’s Iveco Group has confirmed that it has reached an agreement with Indian auto giant Tata Motors for the full sale of its commercial vehicle manufacturing business through a recommended all-cash voluntary public tender offer.
The goal is to create a combined “global champion” in the commercial vehicle sector with a presence across Europe, India and the Americas, with a focus on sustainable and zero-emission transport.
This follows reports last week that Tata Motors had approached the Agnelli family in Italy, which controls the Iveco Group through investment company EXOR.
Tata Motors is purchasing Iveco through its fully-owned Dutch subsidiary TML Holdings Pte LTD, offering €14.10 in cash for each Iveco share, valuing the deal at around €3.8 billion.
However, the deal does not include Iveco’s IDV defence business (valued at around €1.7 billion), which is currently being fully separated. This is expected to be complete by 31st March, 2026.
Tata’s purchase will only go through once the deal to fully separate the defence business is complete.
According to Iveco, the new entity will have the capacity to sell more than 540,000 commercial vehicles per year.
Iveco also said the new company “will be able to drive better operating leverage by spreading its capital investments over larger volumes generating important efficiencies and reducing the cash flow volatility inherent in the commercial vehicles sector”.
Iveco Group’s FPT powertrain business is also expected to benefit with further growth.
Natarajan Chandrasekaran, chairman of Tata Motors 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 our ability to invest boldly. I look forward to securing the necessary approvals and concluding the transaction in the coming months.”
Suzanne Heywood, chair of Iveco Group added: “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 industrial footprint of Iveco Group as a whole.”
