Tata Motors and Iveco collaborate in significant takeover deal
In a significant move to bolster its global ambitions, Tata Motors has announced the acquisition of Italian automaker Iveco. This strategic fit combines complementary product lines with minimal geographic overlap, providing Tata immediate entry into new markets such as Europe, South America, Africa, and Oceania. The deal is expected to significantly expand Tata's commercial vehicle portfolio and global footprint.
One of the key advantages of the acquisition is Tata's access to advanced technologies in electric and hydrogen powertrains from Iveco. This move supports Tata's commitment to sustainable and future-ready mobility solutions. The deal also brings operational synergies by merging Tata’s cost-efficient engineering with Iveco’s Italian engineering sophistication and technical centers, enhancing product innovation and customer-centric solutions across diverse mobility needs.
The combined company, with annual sales of over 540,000 vehicles and revenues approximately Rs 2.2 lakh crore, will have a strong presence across Europe, India, and the Americas. About half of the combined revenue is expected to come from Europe, 35% from India, and the rest primarily from the Americas.
The acquisition is projected to close in the first half of 2026, subject to regulatory approvals and the successful separation of Iveco's defence unit. If all goes as planned, Iveco's powertrain arm, FPT, is expected to play a vital role in expanding the technological edge of the new entity.
Shareholders of Iveco will be offered €14.1 per share in cash, with an additional dividend between €5.5 and €6.0 per share expected from the defence business sale. Tata Motors has committed to maintaining Iveco's corporate identity and key operational sites, and no immediate job cuts are anticipated as a result of the merger.
The acquisition represents a major step forward for both Tata Motors and Iveco, providing the scale and diversity needed to thrive in a rapidly evolving industry landscape. The deal's financing is firmly in place, with banks like Morgan Stanley and MUFG Bank underwriting the required funding. A general meeting will be convened to secure shareholder approval during the offer period.
The proposed deal between the two companies is estimated to be approximately €3.8 billion, excluding Iveco's defence unit. The acquisition will allow both companies to accelerate their shift towards sustainable mobility and low-emission technologies. Additional opportunities are anticipated in Asia and Africa.
The Iveco board has unanimously endorsed the offer, and the headquarters of Iveco will remain in Turin. A two-year period of non-financial covenants has been agreed upon to safeguard employees' rights and prevent plant closures. The deal's largest shareholder, Exor N.V., holds about 27% of Iveco's common shares and over 43% of voting rights, and has committed to support the deal.
In summary, the acquisition of Iveco by Tata Motors is a strategic move that aligns well with Tata's objective to become a leading global commercial vehicle player with a strong sustainable transport offering and diversified geographic exposure. The deal creates a global commercial vehicle ecosystem, improves operational excellence, and accelerates the shift towards sustainable mobility.
- As a result of the acquisition, Tata Motors will now have an entry into new markets that offer diverse mobility needs, such as sports events and activities, given the increased reach across Europe, South America, Africa, and Oceania.
- The combined company is projected to invest significantly in sustainable and future-ready mobility solutions, including electric and hydrogen powertrains, which could contribute to the emerging sports sector with eco-friendly transportation options for athletes and spectators alike.
