Tata Motors to acquire Iveco's non-defence business for €3.8 billion

The acquisition will create a €22 billion global CV giant with annual volumes of 540,000 units, expanding Tata's footprint into Europe and low-emission technology

Tata Motors has announced a €3.8 billion all-cash voluntary tender offer to acquire 100 per cent of the common shares of Iveco Group N.V., excluding its defence business. Once completed, the acquisition will create one of the world’s largest commercial vehicle (CV) groups, with combined annual revenues of around €22 billion (over Rs 2 trillion).

 

The transaction was approved by the Executive Committee of Tata Motors’ Board on Wednesday and is subject to regulatory approvals, including merger control clearances across jurisdictions, foreign direct investment rules, and EU foreign subsidy regulations. Completion is expected by April 2026.

 

The acquisition will be routed through a wholly owned subsidiary of Tata Motors, to be incorporated under Dutch law. The offer is priced at €14.1 per share, implying a 22–25 per cent premium to Iveco’s three-month volume-weighted average price before July 17, the date prior to deal speculation. 

   

The move comes just months after Tata Motors announced the demerger of its commercial vehicle and passenger vehicle businesses. The Iveco deal is aimed at bolstering the commercial vehicle arm’s global competitiveness, giving it an expanded geographic footprint, access to advanced powertrain technology (via Iveco’s FPT Industrial), and a presence across over 30 countries.

 

“This is a logical next step following the demerger,” said N Chandrasekaran, chairman, Tata Motors. “It will allow the combined group to compete on a truly global basis with two strategic home markets in India and Europe.”

 

The combined entity will have annual volumes of over 540,000 units, with revenues split between Europe (around 50 per cent), India (around 35 per cent), and the Americas (around 15 per cent). Iveco’s defence business is being carved out prior to the acquisition and is expected to be sold separately by March 2026.

 

Executives from both companies emphasised the strategic complementarity of the deal. Iveco designs and manufactures trucks, buses, and powertrains, and provides financial services to dealers and customers. Tata Motors, already a dominant player in India’s CV market, gains a strong foothold in Europe and access to low-emission technology and global manufacturing capabilities.

 

“This combination is a strategic leap forward in our ambition to build a future-ready CV ecosystem,” said Girish Wagh, executive director, Tata Motors.

 

Olof Persson, chief executive officer, Iveco Group, said the tie-up would “accelerate innovation in zero-emission transport” and improve access to global markets.

 

Iveco’s board has unanimously supported the offer and recommended it to shareholders. Exor N.V., Iveco’s largest shareholder, holding 27.06 per cent equity and 43.11 per cent voting rights, has signed an irrevocable commitment to tender its shares and vote in favour of the deal. 

 

The offer also includes a provision for Iveco shareholders to receive an estimated extraordinary dividend of €5.5–6.0 per share, linked to the sale of the defence business.

 

Once approved, Tata Motors will acquire 100 per cent of Iveco’s 271 million outstanding common shares, subject to a minimum acceptance of 80 per cent.

 

The acquisition is seen as Tata Motors’ boldest international move since its 2008 takeover of Jaguar Land Rover. With the commercial vehicle sector undergoing a rapid transition toward electrification and digitalisation, the deal positions the company to better manage cyclicality, spread investment risks, and tap into a more diverse product and customer base.

 

The combined group is expected to maintain its current industrial footprint and employee base, ensuring a smoother integration process.