‘Tata Group’s biggest deal since acquiring Corus’: Behind the Tata Motors €3.8 billion purchase of truckmaker Iveco

In what will be its largest acquisition since taking over luxury car maker Jaguar Land Rover in 2008, homegrown Tata Motors is acquiring Italian commercial vehicle (CV) company Iveco.

Tata Motors will pay about €3.8 billion for Iveco, excluding the company’s defence business and the net proceeds from the defence business separation. This will also be Tata Group’s largest acquisition after the acquisition of European steel maker Corus in 2007.

“The 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 540,000 units per year,” the companies said late on Wednesday night.

Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of €22 billion (₹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.

Tata Motors is the largest truck and bus maker in India. In the full year ending March 2025, Tata Motors sold close to 3.77 lakh commercial vehicles, down 5 per cent from a year ago. However, much of those sales were in the domestic market.

The acquisition of Iveco will drive Tata Motors into more developed markets, competing with the CV giants like Volvo, Daimler and Scania.

“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,” said Natarajan Chandrasekaran, the chairman of Tata Motors.

Contours of the Tata-Iveco deal

The completion of the offer is conditional on the separation of Iveco’s defence business.

The public offer is for all issued common shares of Iveco Group after the separation of that business, at a price of €14.1 per share (cum dividend, excluding any dividend distributed in relation to the sale of the defence business) in cash.

The offer price represents a 34-41 per cent premium based on the volume-weighted average price for the three months to 17 July 2025 of €16.02 (prior to any speculation around a possible offer) after deducting the €5.5-6.0 per share estimated extraordinary dividend.

Exor N.V., Iveco Group’s largest shareholder, has irrevocably committed to support the deal and tender its shareholding representing about 27.06 per cent of Iveco Group’s common shares and 43.11 per cent of all voting rights.

The offer is aimed at acquiring 100 per cent of Iveco’s common shares with a subsequent delisting of Iveco Group from Euronext Milan.

The deal is subject to obtaining the required merger control, foreign direct investment, EU Foreign Subsidies Regulation and financial regulatory clearances. It is expected to be completed in the first half of 2026.

“This combination is a strategic leap forward in our ambition to build a future-ready commercial vehicle ecosystem. By integrating the strengths of both organisations, we are unlocking new avenues for operational excellence, product innovation and customer-centric solutions,” said Girish Wagh, the executive director of Tata Motors.

The Iveco board has concluded that the offer is in the long-term interests of Iveco, the sustainable success of its business and employees, customers, shareholders and other stakeholders, and therefore unanimously supported the deal and recommended the offer for acceptance by Iveco’s shareholders.

“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,” said Olof Persson, CEO of Iveco Group.

Shares of Tata Motors had declined around 3.5 per cent on Wednesday to close at ₹668.40 on the BSE after reports of the deal first emerged.

This acquisition comes at a time when Tata Motors is splitting its commercial and passenger vehicle businesses into two separate listed entities.

It also comes at a crucial juncture when the automotive industry is rapidly driving towards electrification and sustainable fuels.

Tata Motors’ British Jaguar Land Rover unit has also stepped up its investments in recent years. JLR expects to invest GBP 18 billion over a five-year period.

How Tata Motors financially digests this mega deal for Iveco and navigates the current period of global trade and geopolitical uncertainties is something investors will closely watch.

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