India’s Tata Motors has announced plans to acquire Italian truck and bus manufacturer Iveco Group in a €3.8 billion deal (NZ$7.4b) which is set to boost its presence in the global commercial vehicle sector.
The all-cash voluntary tender offer, backed by Iveco’s board and major shareholder Exor –– a diversified holding company controlled by the Agnelli family –– is contingent on the separation of Iveco’s defence business, which is expected to be sold or spun off by March 2026.
The proposed deal will see the two companies combine their largely complementary operations, with the aim of creating a globally diversified commercial vehicle business with annual sales of around 540,000 units and €22 billion ($43b) in revenue.
“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,” Tata Motors chairman Natarajan Chandrasekaran says.
Under the terms of the offer, shareholders will be paid €14.10 per Iveco share, excluding any dividends related to the defence divestment.
Including an estimated extraordinary dividend of €5.50–€6.00 per share from that sale, the offer represents a premium of up to 41% over the company’s three-month average share price.
Iveco chair Suzanne Heywood says the move reflects “a shared vision for sustainable mobility” and will strengthen employment and industrial security across the group.
Both companies said the merged business would retain Iveco’s headquarters in Turin, Italy, and maintain existing plants and jobs for at least two years following completion.
The combination is expected to enhance the companies’ global reach, reduce cashflow volatility, and boost investment in zero-emission technologies. Iveco’s powertrain division, FPT, will also play a central role in the new group.
Iveco chief executive Olof Persson says joining forces with Tata Motors will allow the company to “accelerate innovation in zero-emission transport and expand our reach in key global markets”.
The deal has the full backing of the Iveco board and Exor, which holds 27% of Iveco’s shares and over 43% of voting rights. Exor has committed to tender its stake and vote in favour of the transaction.
The offer is subject to regulatory approvals, including merger control and foreign investment clearances in multiple jurisdictions, and is expected to close in the second quarter of 2026.
If the sale of the defence business is not completed by March 31, 2026, Iveco has agreed to spin it off into a separately listed entity to allow the takeover to proceed. Upon completion, Tata intends to delist Iveco from the Euronext Milan stock exchange and operate it as a wholly owned subsidiary.
Tata is financing the deal with backing from Morgan Stanley and MUFG Bank, while Goldman Sachs advised Iveco. Both parties say the deal will support long-term growth, product innovation, and a more sustainable commercial vehicle industry.
