Tata Motors to drive Iveco’s CV business for $4.4 billion, the group’s biggest cross border M&A since Corus

Tata Motors has agreed to buy Turin-based truck maker Iveco from its principal shareholder, the Agnelli family, for $4.4 billion ($3.8 billion euros) to provide its commercial vehicle (CV) arm–soon to be listed independently–with much-needed technological heft and global access.

This will be the largest acquisition by the Tata Group in the automotive space, almost twice the size of its $2.3 billion Jaguar Land Rover purchase in 2008 and the biggest by the conglomerate since it bought Corus in 2007 for $12 billion.

ET was the first to report July 30 on the Iveco acquisition plan as well as the deal structure and timeline. Investors in Tata Motors weren’t too pleased about the price tag, sending the stock down 3.5% to Rs 668.40 on the BSE at the close on Wednesday for a market cap of Rs 2.46 lakh crore. Shares of Iveco also closed flattish on Wednesday after surging 7.4% intraday on Tuesday. The stock has more than doubled this year, valuing the company at $5.68 billion. On Wednesday the stock touched a new 52-week high.

Iveco manufactures commercial trucks, powertrains, buses and other specialty vehicles. Iveco Group clocked Euro 15.2 billion in turnover in CY24. It had said in May that it would press ahead with plans to either spin off its defence business by the end of 2025 or sell it, having already received offers from potential buyers.

Iveco is demerging its business and the defence unit will be sold separately to Italian state backed Leonardo. Tata Motors will be buying 27.06% from Exor, the investment company of the Agnelli family, and launch a tender offer–similar to India’s open offer mechanism–to buy out the all other smaller shareholder groups. Exor also controls 43.11% of the voting rights of the truck maker. The public offer is for all issued common shares of Iveco Group after the separation of that business, at a price of Euro 14.1 per share (including dividend but excluding any dividend distributed after the sale of the defence business). The offer price is at 34%-41% premium based on the volume-weighted average price for the three months to 17 July 2025 of Euro 16.02, but after deducting the Euro 5.5-6.0 per share estimated extraordinary dividend distributed to shareholders from the sale of the defence unit, the two companies said in a statement late on Wednesday evening. The Offer is aimed at acquiring 100% of Iveco’s common shares with a subsequent delisting of Iveco Group from Euronext, Milan.

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The transaction is expected to close by April 2026, subject to all necessary formalities and regulatory clearance. “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,” said Natarajan Chandrasekaran, Chairman of Tata Group. “The combined group’s complementary businesses and greater reach will enhance our ability to invest boldly.”The Agnelli family, among the most influential in Europe, has interests in engineering, agriculture and automotive controls. It’s a prominent stakeholder in Ferrari and also controls Stellantis, the Dutch automotive group that houses Fiat and auto brands such as Alfa Romeo, Chrysler, Citroën, Jeep, Maserati, and Peugeot.

The Tata Group has a long association with the group. Fiat and Tata Motors had established a 50:50 joint venture, Fiat India Automobiles Ltd, which set up a plant for cars and engines for both brands at a factory in Maharashtra. Even though the relationship went through ups and downs, the Agnelli family had invited former the late Ratan Tata to join the global board of Fiat.

“This strategically significant combination brings together two businesses with a shared vision for sustainable mobility,” said Suzanne Heywood, Chair of Iveco Group. “The reinforced prospects of the new combination are strongly positive in terms of the security of employment and the industrial footprint of Iveco Group as a whole.”

Tata Motors is routing the acquisition through a Dutch-based, wholly owned vehicle, said people aware of the matter. MUFG is the sole financing bank for the entire $4.4 billion (Euro 3.8 billion) acquisition. Tata Motors is taking a one-year bridge loan with guarantees from the company. Morgan Stanley is advising Tata Motors, while Goldman Sachs is working with the Agnelli family and Iveco. Clifford Chance, Greenberg Traurig were the legal advisors.

The acquisition comes as the global CV industry is going through a rapid transition toward electric and hydrogen-powered drivetrains as well as autonomous driving, with China taking the lead. In June, Toyota and Germany’s Daimler Truck finalised a roughly $6.4 billion merger of their heavy goods vehicle businesses in Japan last month. The German company is the world’s largest truck manufacturer.

Iveco, the smallest of the bigger European CV players, has long been a takeover candidate but the Italian government had vetoed previous attempts, considering the company a strategic national asset with an inhouse defence unit. In 2021, the government blocked an offer from Chinese rival FAW. At that point, the Agnellis controlled Iveco through their industrial conglomerate CNH Industrial. It was subsequently spun out and listed separately in early 2022.

“The government is closely following the evolution of the matter,” industry minister Adolfo Urso had said earlier this month, when news of the Tata-Agnelli talks were first reported by Reuters. “In particular, we are doing this as regards the role of Iveco for Italy and its impact on jobs.”

Urso said the government will hold a meeting on the potential deal on July 31.

Keeping the defence business out of the deal would satisfy the Italian government’s demand to keep the business in local hands.

For Tata Motors, a deal will give access to technology, innovation and markets for the CV business, which has been a laggard. Europe accounts for 74% of Iveco’s revenue although it’s present in Latin America and North America as well. In comparison Tata’s CV division generates 90% of revenue from India. A successful takeover could nearly triple commercial vehicle revenue from Rs 75,000 crore to over Rs 2 lakh crore, but margins remain a concern. Tata Motors’ ebit margin is 9.1%, while Iveco’s adjusted commercial vehicle margins hover around 5.6%, according to an analysis by ET Prime.

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