Tata Motors to acquire Iveco for $4.5 billion in its biggest deal yet

The Iveco deal will be Tata Motors' largest auto acquisition, surpassing its $2.3 billion purchase of Jaguar Land Rover in 2008

Tata Motors is preparing to acquire Italian truck manufacturer Iveco from its principal shareholder, the Agnelli family, in a transaction valued at $4.5 billion, according to a report by The Economic Times. If finalised, this would become the Tata Group’s second-largest acquisition – after its $12.9 billion purchase of Corus in 2007 – and the most significant transaction to date for the automotive arm. Previously, Tata Motors acquired Jaguar Land Rover (JLR) in 2008 for $2.3 billion.

 

The boards of Tata Motors and Turin-based Iveco are meeting on Wednesday to approve the transaction, The Economic Times reported. An official statement regarding the acquisition could be made on the same day.

   

Iveco in talks over defence and core operations 

On Tuesday, Iveco confirmed that it is engaged in “ongoing, advanced” discussions with multiple parties regarding two distinct transactions—one related to its defence business and the other involving the remaining operations.

 

The company had earlier disclosed its plans to either divest or spin off its defence arm by the end of 2025. Iveco also confirmed that it had already received offers from prospective buyers.

Apart from manufacturing trucks, Iveco also produces buses and engines. The firm currently has a market capitalisation of approximately $4.9 billion. Its majority shareholder, Exor, holds a 27.1 per cent equity stake and 43.1 per cent of the voting rights in the company. Exor is the Agnellis’ investment company.

 

Also read: Tata Motors share price today

 

Advisors on Tata Motors-Iveco deal 

Morgan Stanley is advising Tata Motors on the transaction, while Goldman Sachs is working with the Agnelli family and Iveco. Legal support is being offered by British law firm Clifford Chance. As per reports by The Economic Times, Tata Motors intends to structure the acquisition through a Dutch-based special purpose entity, which will be entirely owned by the Indian automaker.

 

Discussions have been ongoing for the past six weeks and have intensified in recent days, according to the report. The two sides are currently operating under an exclusivity agreement for bilateral negotiations, which is due to expire on Aug 1.

 

Also read: Tata Motors' global wholesales fall 9% in Q1, led by JLR and PV segments

 

Iveco deal likely to face scrutiny  Although Iveco is one of Europe’s recognised commercial vehicle manufacturers, it is the smallest among the continent’s leading players—a list led by Volvo, Daimler, and Traton. This has frequently positioned it as a potential acquisition target in the eyes of investors and analysts.

 

However, the company’s involvement in defence manufacturing has posed regulatory challenges, often narrowing the field of potential acquirers. Any significant deal involving Iveco is expected to trigger review under Italy’s ‘golden power’ rules, which allow the government to impose conditions on transactions that affect companies deemed of strategic national interest.

 

Iveco employs approximately 36,000 people worldwide, including around 14,000 in Italy.