Tata Motors said on Wednesday that it had agreed to buy Italian truck maker Iveco Group in a deal worth 3.8 billion euros ($4.36 billion), after the Italian truckmaker separately agreed to sell its defence business to Leonardo. As part of the arrangement, Tata Motors will launch an all-cash tender offer on Iveco’s shares, subject to the defence business sale, at 14.1 euros per share. The Tata group auto major said it had entered an agreement with Iveco Group to set up a commercial vehicles group in a deal that will support the Mumbai-headquartered company’s commercial vehicle business.
The tender offer represents a total consideration of approximately 3.8 billion euros for Iveco Group, excluding Iveco’s defence business, according to Tata Motors.
The Iveco Group logged a reported turnover of 15,289 million euros in FY24 (including the defence business). Iveco Group NV designs, produces and sells trucks, commercial vehicles, buses, and defence vehicles, through its various businesses. In addition to powertrain applications, the group offers a range of financial products and services to dealers and customers.
Iveco’s defense unit will be separated before the acquisition, at a deal value of 3.8 billion euros, equivalent to Rs 34,200 crore (ecxluding the defence unit).
The offer price is set at Rs 14.1 euros (Rs 1,270) per share.
Iveco Group is a European commercial vehicle and mobility company.
Tata Motors also said that the offer will “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 c. 540k units per year. Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of c. 22 billion euros (Rs 2,20,000 crore+) split across Europe (c.50 per cent), India (c.35 per cent) and the Americas (c.15 per cent) with attractive positions in emerging markets in Asia and Africa.
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, said Tata Motors.
“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 added.
“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,” said Natarajan Chandrasekaran, Chairman, Tata Motors.
Tata Motors said the acquisition is expected to support the Commercial Vehicles business of Tata Motors with :
- Expanded capabilities
- The creation of a global player
- Leveraged strengths
- Diversified portfolio
Earlier on Wednesday, Tata Motors shares ended 3.5 per cent lower at Rs 668.4 piece on BSE.
