Tata Motors To Acquire Italy Truckmaker Iveco For Over Rs 33,000 Crore In All-Cash Deal

Tata Motors Ltd. said on Thursday that it will acquire Iveco S.p.A, in a deal valuing the Italy-based truckmaker at 3.82 billion euros, or approximately Rs 33,360 crore.

The Jaguar Land Rover owner it will acquire all the 27.2 crore outstanding shares of Iveco in an all-cash public tender offer valued at 14.10 euros per share.

The $4.37 billion deal is the single largest deal by Tata Motors. The previous largest deal was in 2008, when it acquired Jaguar Land Rover from Ford for $ 2.3 billion.

The transaction will be executed through a newly formed company fully owned by TML CV Holding Pte. Ltd., a Singapore-based subsidiary of Tata Motors. The Offer aims shares of Iveco, currently listed on Euronext Milan, and to delist the company from the exchange.

The news was first reported by Economic Times early Wednesday citing people familiar with the matter. Shares of Tata Motors ended 3.5% lower on BSE at Rs 668.40 apiece after the report later in the day, compared to 0.2% gains in the country's benchmark BSE Sensex.

The offer is conditional on the prior sale or spin-off of Iveco’s defence business, which is not part of the acquisition. Iveco had previously announced that it would divest the unit. The closing of the defence business transaction is targeted for the first quarter of 2026 and no later than March 2026.

The estimated extraordinary dividend from this divestment is 5.5–6.0 euros per share, based on an enterprise value of 1.7 billion euros per share. The final payout is subject to completion adjustments.

The offer, combined with the estimated dividend, represents a 22%–25% premium over the volume-weighted average price of EUR 16.02 for the three months to 17 July 2025, before any takeover speculation. Excluding the dividend, the offer implies a 34%–41% premium.

The board of directors of Iveco Group has unanimously recommended the offer. Exor N.V., the company’s largest shareholder, has also committed to tender its 27.06% stake, which accounts for 43.11% of the voting rights.

The offeror has secured committed financing for the full offer amount, ensuring deal funding and a high certainty of completion. The transaction is subject to approvals under merger control, foreign direct investment, EU Foreign Subsidies Regulation, and financial regulations.

Tata Motors expects to complete the transaction in the first half of 2026. The Offer Document will be submitted to Italian regulator CONSOB after securing the necessary authorisations and will be published following regulatory approval.

Tata Motors Chairman N Chandrasekaran 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," Chandrasekaran added.

Brokerage firm Investec called the acquisition “another rickety ride in the offing.” The firm said the deal is sizeable and could have a positive impact on profit, but warned it is margin dilutive and offers lower growth prospects compared to Tata Motors’ Indian operations.

The research firm noted that the European commercial vehicle industry faces a subdued outlook, implying muted growth for Iveco. The brokerage said it is “not enthused” by the acquisition.

Tata Motors has agreed to a set of non-financial covenants for two years after the settlement date to support long-term commitments to Iveco’s employees, suppliers, and customers. Tata Motors also said it intends to continue supporting and accelerating Iveco’s existing strategy after the deal.