Tata launches a takeover bid to buy Iveco

The Indian industrial giant Tata Motors has decided to become a global player in the commercial vehicle sector with the acquisition of Iveco Group, in a deal valued at €3.8 billion. The company has submitted a voluntary public takeover bid (OPA) for 100% of Iveco's shares, excluding its Defense division, in what is one of the largest cross-border transactions in the sector in Europe this year.

The investment vehicle will be TML CV Holdings, a subsidiary of Tata Motors, which will offer €14.1 per share in cash to Iveco Group shareholders once the spin-off of its defense business is completed. This amount will be complemented by an estimated extraordinary dividend of between €5.5 and €6 per share, linked to the sale of this business area, representing a premium of up to 41% over the average price of the three months prior to the announcement.

Iveco's Board of Directors has unanimously approved the offer and recommends its acceptance. In addition, the group's largest shareholder, Exor, has signed a support commitment, offering its 27% stake and 43.1% of the voting rights. The offer is financed by Morgan Stanley and MUFG Bank.

The combination of Tata Motors and Iveco will create a group with combined revenues of approximately €22 billion and annual sales of over 540,000 units. Its geographical presence will be spread across Europe (50%), India (35%), and the Americas (15%), with significant positions in Asia and Africa.

Both companies have highlighted the complementary nature of their product portfolios and industrial networks, with no significant overlap. Iveco will contribute its strength in Europe and its expertise in powertrains through FPT Industrial, while Tata Motors will contribute its dominance in the Indian market and its large-scale manufacturing capacity.

The offer is subject to the effective spin-off of Iveco's defense business, expected in the first quarter of 2026, as well as obtaining regulatory approvals for competition, foreign investment, and financial regulations in the EU and other jurisdictions.

Both companies have expressed optimism regarding the planned timeline and are confident of closing the transaction during the second quarter of 2026.

Upon completion of the transaction, Tata Motors plans to delist Iveco from Euronext Milan and convert it into a wholly-owned subsidiary, enabling a more efficient integration aligned with the company's strategic objectives.

Tata Motors has made a series of non-financial commitments for at least two years following the settlement of the offer. These include maintaining the Iveco headquarters in Turin, preserving its corporate identity, maintaining its workforce, and respecting current labor and pension agreements.

The resulting group also undertakes not to close any industrial plants as a direct result of the merger and to maintain a governance structure that ensures oversight by independent directors.

For Tata Motors, this transaction represents the culmination of its strategy to spin off its commercial vehicle business and position it on the global stage. For Iveco, the merger with the Indian group strengthens its financial position, expands its access to emerging markets, and accelerates its technological transition.