Tata Motors Limited and Iveco Group N.V. have announced a landmark agreement to combine their commercial vehicle businesses, establishing a powerful global champion in the sector. Iveco Group, a European leader in commercial vehicles and mobility, and Tata Motors, a global automotive powerhouse, will bring together complementary strengths, global reach, and a shared strategic vision aimed at driving long-term growth and creating significant value across key markets.
The acquisition will be executed through a recommended all-cash voluntary tender offer for all issued common shares of Iveco Group, excluding its defence business, by TML CV Holdings PTE LTD, a wholly owned subsidiary of Tata Motors. The offer is priced at €14.1 per share, subject to adjustments, and represents a total consideration of approximately €3.8 billion. This excludes proceeds from the separation of Iveco’s defence business, which is a key condition for completing the transaction.
The offer also includes an estimated extraordinary dividend of €5.5–6.0 per share linked to the €1.7 billion enterprise value of the defence business, bringing the implied premium to 22%–25% based on recent market averages. The Iveco Group Board has unanimously endorsed the offer and recommends shareholder acceptance. Furthermore, Exor N.V., Iveco’s largest shareholder with a 27.06% stake and 43.11% of voting rights, has irrevocably committed to supporting and tendering its shares.
With secured financing already in place, Tata Motors has ensured a high level of certainty in deal completion. The offer is subject to customary regulatory approvals, including merger control, foreign direct investment, EU Foreign Subsidies Regulation, and financial regulatory clearances. It is expected to be finalized in the first half of 2026, with the sale of the defence business targeted for completion by 31 March 2026. If not completed, Iveco’s defence division will be spun off into a separately listed entity by 1 April 2026, allowing the offer to proceed.
The strategic combination will create a stronger, more diversified global enterprise with sales of over 540,000 vehicles annually and combined revenues of approximately €22 billion (INR 2,20,000 Cr+). Geographically, the new group’s revenue will be split across Europe (50%), India (35%), and the Americas (15%), with a significant footprint in emerging markets in Asia and Africa.
By preserving industrial footprints and workforce structures, the merger is designed to facilitate a smooth integration. It will also allow the combined entity to better invest in next-generation sustainable mobility solutions, expand product offerings, and achieve greater efficiencies through increased scale.
Key executives expressed strong support for the transaction. Natarajan Chandrasekaran, Chairman of Tata Motors, called the move “a logical next step following the demerger of Tata Motors’ commercial vehicle business,” enabling the group to compete globally with strategic home markets in Europe and India. Suzanne Heywood, Chair of Iveco Group, emphasized the transaction’s alignment with a shared vision for sustainable mobility and job security. Girish Wagh, Executive Director at Tata Motors, said the combination would unlock innovation, operational excellence, and new customer solutions. Olof Persson, CEO of Iveco Group, added that the partnership would boost industrial capabilities and expand market reach.
The Iveco Board of Directors has received a fairness opinion from Goldman Sachs Bank Europe SE, confirming the financial fairness of the offer. In connection with the deal, Exor has also agreed to transfer its special voting shares back to Iveco at no cost. Additionally, Iveco Board members holding approximately 1.39% of Iveco’s common shares have agreed to tender their shares and vote in favor of the offer at the forthcoming extraordinary general meeting (EGM).
The offer aims to acquire 100% of Iveco’s common shares, followed by a delisting of the company from Euronext Milan. Tata Motors and Iveco believe full ownership is essential to secure long-term success and value creation. If Tata Motors secures 80% of the shares, a pre-agreed transaction (the “Share Sale”) will enable full acquisition.
The two companies have also agreed on a set of Non-Financial Covenants (NFCs) valid for two years after closing. These include commitments to preserve Iveco’s strategy, brand identity, and headquarters in Turin, Italy, and to avoid any material restructuring or plant closures resulting from the deal. Employee rights and benefits will be respected, and no job cuts are planned as a direct result of the merger. Governance arrangements ensure that Iveco Group retains its own operating and reporting structure, with two independent board members appointed to monitor adherence to the covenants.
Tata Motors has also committed to keeping Iveco prudently capitalized and well-financed. The company supports Iveco’s existing Environmental, Social, and Governance (ESG) initiatives, as highlighted in its 2024 sustainability reports.
The Offeror plans to submit a request for regulatory approval of the offer document to Consob within 20 days. The EGM will be held at least six Dutch business days before the close of the offer acceptance period. Subject to regulatory approval, the offer is anticipated to close in Q2 2026.
Advisors to the transaction include Goldman Sachs, De Brauw Blackstone Westbroek, PedersoliGattai, and Maisto e Associati for Iveco Group. Tata Motors is advised by Morgan Stanley India Company Private Limited, with financing underwritten by Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc., and MUFG Bank, Ltd. Legal counsel is provided by Clifford Chance, while PwC and Kearney supported due diligence. Greenberg Traurig serves as independent legal advisor to the Iveco Board’s non-executive members.
