Tata Motors to acquire Iveco in €3.8Bn deal

The offer will be made by a new company set up in the Netherlands but fully owned by Tata Motors. Tata is offering €14.10 in cash for each Iveco share, excluding dividends from Iveco’s defence business, which is being sold separately. This values the deal at around €3.8 billion. The offer will only go through once the defence business is fully separated, with the transaction expected to close in the first half of 2026.

The separation of Iveco’s defence business, valued at approximately €1.7 billion, is expected to close by 31 March 2026. If the sale is not completed by then, a spin-off will occur by 1 April 2026. However, that will likely not be a problem. According to Reuters, the state-controlled group Leonardo has agreed to take over the defence unit.

The combined group brings together annual sales of over 540,000 vehicles and projected revenues of approximately €22 billion, distributed across Europe (50%), India (35%) and the Americas (15%). The new entity will hold a competitive advantage in emerging markets across Asia and Africa and benefit from increased scale in product development, manufacturing, and electrification.

The partnership is positioned to accelerate innovation in zero-emission transport. Tata and Iveco plan to leverage their respective supplier networks and industrial capabilities to scale up electric mobility solutions globally. Iveco’s powertrain division, FPT Industrial, will be a key beneficiary in this effort.

“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.

Iveco’s Board of Directors has unanimously backed the offer, citing it as being in the best long-term interest of the company and its stakeholders. “We are proud to announce this strategically significant combination, which 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 industrial footprint of Iveco Group as a whole.”

Tata Motors has promised to keep Iveco’s factories and jobs in place, with the company’s headquarters staying in Turin. Both sides have signed off on a set of non-financial commitments that will stay in effect for two years after the deal closes, covering things such as job conditions and investment plans.

Iveco employs around 36,000 people, including 14,000 in Italy, and the deal with Tata is likely to face close scrutiny from the Italian government.

Girish Wagh, Executive Director at Tata Motors, highlighted the strategic impact of the merger: “By integrating the strengths of both organisations, we are unlocking new avenues for operational excellence, product innovation and customer-centric solutions. This partnership not only enhances our ability to serve diverse mobility needs across markets, but also reinforces our commitment to delivering sustainable transport solutions that are aligned with global megatrends.”

The Indian company demerged its passenger and commercial vehicles business last year, to enable the companies to pursue their respective strategies to achieve higher growth with greater agility. Tata Motor Chairman Natarajan Chandrasekaran said that taking over Iveco is “a logical next step,” and would “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,” he added.

ivecogroup.com, tatamotors.com (PDF), reuters.com