In a landmark cross-border acquisition, Tata Motors Ltd (TML) has announced that it will acquire Italian commercial vehicle manufacturer Iveco group NV in an all-cash transaction valued at 3.8bn (billion) euros or around Rs38,240 crore. This marks the Indian auto giant’s largest acquisition to date, surpassing its 2008 purchase of Jaguar Land Rover.
The deal, which excludes Iveco’s defence business, will be executed through a newly formed Dutch entity fully owned by TML CV Holdings Pte Ltd, a Singapore-based subsidiary of Tata Motors. The acquisition includes a voluntary public tender offer at 14.10 euros per share, targeting all 271mn (million) common shares of Iveco group listed on Euronext Milan, with the aim of fully delisting the Italian company.
The acquisition is contingent upon the prior divestment of Iveco’s defence business which has already been agreed to be sold to Italy’s State-owned Leonardo SpA at an enterprise value of 1.7bn euros. This unit includes military trucks and contributes core profits of 108mn euros. The deal with Leonardo is expected to close by March 2026.
Shareholders of Iveco are expected to receive an extraordinary dividend of 5.5 euros–6.0 euros per share from this sale, bringing the total consideration per share to nearly 20.10 euros when combined with Tata’s offer — a 22%–25% premium over the stock’s three-month volume-weighted average price before takeover speculation began.
Tata Motors chairman N Chandrasekaran described the move as a strategic expansion, particularly following the company’s recent demerger of its commercial vehicle business. “This acquisition is a logical next step and will allow the combined group to compete on a truly global basis with two strategic home markets in India and Europe,” he says.
Iveco, which also manufactures buses and powertrains, generated 74% of its 2024 revenues from the European market. With nearly 36,000 employees — 14,000 of them in Italy — it is the smallest among Europe’s top truck-makers.
Analysts see the acquisition as a bid by Tata Motors to gain a foothold in the highly competitive European commercial vehicle space, currently dominated by Volvo, Daimler and Traton.
In a regulatory filing, Tata Motors says it will continue to support Iveco’s existing strategy, including its 'unlimited pathways' transformation programme. The company also committed to a two-year post-deal period of job, supplier, and customer protection through non-financial covenants.
The offer has the full backing of Iveco’s board which has unanimously recommended it to shareholders. Exor NV, the investment arm of Italy’s Agnelli family and Iveco’s largest shareholder with a 27.06% stake and 43.11% voting rights, has agreed to tender its shares under an irrevocable undertaking.
Tata Motors has secured committed financing for the entire 3.8bn euros deal from lenders including Morgan Stanley and MUFG Bank. The company says the offer document will be submitted to the Italian regulator CONSOB following receipt of necessary approvals under EU merger control and foreign direct investment regulations.
Subject to approvals, the transaction is expected to close in the first half of 2026.
Despite the size and ambition of the deal, the market’s reaction was lukewarm. On Thursday morning, Tata Motors’ shares fell 3.5% to Rs668.40 apiece on the BSE, even as the broader Sensex gained 0.2%.
The Italian government, through prime minister (PM) Giorgia Meloni’s administration, has said it welcomes 'quality foreign investment' but will closely monitor the transaction to ensure the protection of local jobs and strategic capabilities. Iveco is a key supplier to the Italian military, as well as governments in the UK, US and Brazil.
The deal will also be subject to scrutiny under the EU Foreign Subsidies Regulation and various national competition authorities across Europe, Africa and Asia.
Once complete, the deal will give Tata Motors access to new markets, engineering capabilities and a broader global footprint. The combined group is expected to have annual sales exceeding 540,000 vehicles and revenues around 22bn euros.
Iveco’s shares have risen around 25% since mid-July when early reports of a possible takeover by Tata surfaced. They closed at 19.01 euros on Wednesday.
With Tata Motors aiming to delist Iveco and operate it as a wholly-owned subsidiary, the move represents a bold and historic leap in its ambition to become a global leader in commercial vehicles.
