Italy said to support breakup of Iveco with sales to Tata, Leonardo

By Donato Paolo Mancini and Alberto Brambilla

 

The Italian government is broadly supportive of Iveco Group NV’s plans to break up its business by selling its defense unit to Leonardo SpA and its commercial trucking division to India’s Tata Motors Ltd., according to people familiar with the matter.

 

Prime Minister Giorgia Meloni’s government has privately signaled it would back the proposed transaction as long as Iveco’s strategically important defense unit is sold to a group led by Leonardo, a state-controlled defense company, said the people, who asked not to be identified discussing sensitive information.

 

The government’s priorities include protecting jobs and intellectual property, although it hasn’t fully articulated its approach, according to the people. One option currently being discussed is using a legal instrument that allows the government to set conditions on deals for strategic assets.  

 

 

Rome can block or impose conditions on transactions involving strategic assets under its so-called golden power rule. The government used this tool to set a series of harsh terms during UniCredit SpA’s failed takeover attempt of Banco BPM SpA, which the bank withdrew last week. The Italian government is confident Leonardo will acquire Iveco’s defense unit, the people said.

 

A spokesperson for the Italian government declined to comment. Iveco confirmed Tuesday it was in discussions to break up its business, confirming an earlier Bloomberg report that said the company was preparing to announce the two deals as early as Wednesday, when it is due to report earnings.

 

“The government is closely following the evolution of the matter,” Industry Minister Adolfo Urso said this month. “In particular we are doing this as regards the role of Iveco for Italy and its impact on jobs.” At the same time, he said Italy supports quality foreign investment as long as technology, production and jobs are protected.