TATA MOTORS TO ACQUIRE IVECO GROUP, TOGETHER CREATING A GLOBAL PLAYER IN COMMERCIAL VEHICLES
2 August 202513 min read
Iveco Group Board recommends Tata Motors’ all-cash voluntary tender offer for Iveco Group common shares. Completion of the offer is conditional on the separation of Iveco Group’s defence business
Iveco Group N.V. (“Iveco Group” or “Iveco”) (EXM: IVG), a European leader in commercial vehicles and mobility, and Tata Motors Limited (“Tata Motors”) (NSE: TATAMOTORS), a global automotive leader, announce that they have reached an agreement to create a commercial vehicles group with the reach, product portfolio and industrial capability to be a global champion in this dynamic sector.
The envisaged recommended voluntary tender offer (the “Offer”) will be made by TML CV Holdings PTE LTD or a new limited liability company to be incorporated under Dutch law (the “Offeror”), which will be wholly owned, directly or indirectly, by Tata Motors. The completion of the offer is conditional, inter alia, on the separation of Iveco's defence business and, as such, the public offer is for all issued common shares of Iveco Group after the separation of that business, at a price of EUR 14.1 (cum dividend, excluding any dividend distributed in relation to the sale of the defence business) per share in cash (the “Offer Price”). The Offer represents a total consideration of approximately EUR 3.8 billion for Iveco Group, excluding Iveco's defence business and the net proceeds from the defence business separation. TATA MOTORS TO ACQUIRE IVECO GROUP, TOGETHER CREATING A GLOBAL PLAYER IN COMMERCIAL VEHICLESOffer highlights
The Offer Price along with the estimated extraordinary dividend to be distributed to shareholders in relation to the sale of the defence business (assumed at EUR 5.5-6.0 per share) represents a:
22%-25% premium to the volume-weighted average price for the three months to 17 July 2025 of EUR 16.02 (prior to any speculation around a possible offer)
The Offer Price also represents:
34%-41% premium based on the volume-weighted average price for the three months to 17 July 2025 of EUR 16.02 (prior to any speculation around a possible offer) after deducting the EUR 5.5-6.0 per share estimated extraordinary dividend aforementioned
The estimated EUR 5.5-6.0 per share extraordinary dividend is based on the €1.7bn enterprise value for the sale of the defence business and it remains subject to completion adjustments. For further information, please refer to Section E of the Offer Document, which will be published in accordance with applicable law, and to the press release related to the sale of the defence business
The Iveco Group Board of Directors (the “Iveco Board”) unanimously and fully supports the Offer and recommends the Offer for acceptance by the shareholders of Iveco
Exor N.V. (“Exor”), Iveco Group’s largest shareholder, has irrevocably committed to support the Offer and tender its shareholding representing approximately 27.06% of Iveco Group's common shares and 43.11% of all voting rights
The Offeror has committed financing in place for the entire Offer Price, providing certainty of funds and high certainty of deal completion
The Offeror is committed to supporting and accelerating Iveco’s existing strategy and to ensuring the long-term interests of all Iveco’s stakeholders, including employees, suppliers and customers
The Offeror has agreed to a robust set of non-financial covenants for two years following the date of the settlement of the Offer
The Offer is subject to obtaining the required merger control, foreign direct investment, EU Foreign Subsidies Regulation and financial regulatory clearances, and is expected to complete in the first half of 2026
The sale of the companies of the defence business is envisaged to close in Q1 2026 and ultimately no later than 31st March 2026
A powerful combination to create a global leader in commercial vehicles
The offer would bring together two businesses with highly complementary product portfolios and capabilities and with substantially no overlap in their industrial and geographic footprints, creating a stronger, more diversified entity with a significant global presence and sales of over c.540k units per year. Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of c.€22bn (INR 2,20,000Cr+) split across Europe (c.50%), India (c.35%) and the Americas (c.15%) with attractive positions in emerging markets in Asia and Africa.
The combined group will be better positioned to invest in and deliver innovative, sustainable mobility solutions by leveraging both supplier networks to serve customers globally. It will also unlock superior growth opportunities and create significant value for all stakeholders in a dynamic marketplace. By preserving each group’s industrial footprint and employee communities, this complementarity is also expected to foster a smooth and successful integration process.
Furthermore, in the context of the ongoing, rapid transformation of the global commercial vehicle industry, the strategic combination of the commercial vehicle business of Tata Motors and Iveco Group will transform both entities, creating a robust platform with a global customer base and geographically diverse footprint. The new company will be able to drive better operating leverage by spreading its capital investments over larger volumes, generating important efficiencies and reducing the cash flow volatility inherent in the commercial vehicles sector. It will also enable the capabilities of Iveco Group’s successful powertrain business, FPT, to be further enhanced.
Natarajan Chandrasekaran, Chairman of Tata Motors:“This is a logical next step following the demerger of the Tata Motors Commercial Vehicle business and will allow the combined group to compete on a truly global basis with two strategic home markets in India and Europe. The combined group's complementary businesses and greater reach will enhance our ability to invest boldly. I look forward to securing the necessary approvals and concluding the transaction in the coming months.”
Suzanne Heywood, Chair of Iveco Group:"We are proud to announce this strategically significant combination, which brings together two businesses with a shared vision for sustainable mobility. Moreover, the reinforced prospects of the new combination are strongly positive in terms of the security of employment and industrial footprint of Iveco Group as a whole.”
Girish Wagh, Executive Director of Tata Motors: "This combination is a strategic leap forward in our ambition to build a future-ready commercial vehicle ecosystem. By integrating the strengths of both organisations we are unlocking new avenues for operational excellence, product innovation and customer-centric solutions. This partnership not only enhances our ability to serve diverse mobility needs across markets, but also reinforces our commitment to delivering sustainable transport solutions that are aligned with global megatrends. Together, we are shaping a resilient and agile enterprise, equipped to lead in times of transformative change."
Olof Persson, CEO of Iveco Group:“By joining forces with Tata Motors, we are unlocking new potential to further enhance our industrial capabilities, accelerate innovation in zero-emission transport, and expand our reach in key global markets. This combination will allow us to better serve our customers with a broader, more advanced product portfolio and deliver long-term value to all stakeholders.”
Full and unanimous support and recommendation by the Iveco Board
The Iveco Board has concluded that the Offer is in the long-term interests of Iveco, the sustainable success of its business and employees, customers, shareholders and other stakeholders and therefore unanimously supports the Offer and recommends the Offer for acceptance by Iveco's shareholders pursuant to applicable laws and regulations. The Iveco Board recommends that Iveco's shareholders vote in favor of the resolutions relating to the Offer at the extraordinary general meeting of Iveco (the “EGM”) to be held during the acceptance period of the Offer.
The Iveco Board has, in connection with and for the purpose of, the entering into and signing of this merger agreement, received on the date hereof, a fairness opinion from Goldman Sachs Bank Europe SE, Succursale Italia (“Goldman Sachs”) to the effect that, as of such date and subject to the qualifications, limitations, and assumptions set forth in the fairness opinion, (i) the Offer Price is fair, from a financial point of view, to the holders of Iveco's common shares (other than the Offeror and any of its affiliates) in connection with the Offer, and (ii) if applicable, the Purchase Price (as defined in the share purchase agreement attached to the merger agreement) is fair, from a financial point of view, to the Company in connection with the Share Sale (as defined below).[1]
Irrevocable undertaking by Iveco's largest shareholder
Exor, Iveco’s largest shareholder with approximately 27.06% of Iveco's common shares and 43.11% of all voting rights, has today executed an irrevocable undertaking to support the Offer and tender its shareholding and vote in favour of the resolutions that will be proposed at the EGM to be held in connection with the Offer. Subject to settlement of the Offer, Exor has agreed to transfer its special voting shares back to Iveco for nil consideration.
Iveco has agreed to procure that all Iveco Board members holding in aggregate approximately 1.39% of Iveco’s common shares shall, subject to the terms and conditions of the merger agreement, tender all Iveco’s common shares held by them in the Offer and vote in favour of the resolutions that will be proposed at the EGM to be held in connection with the Offer.
Offer Conditions
The Offer will be subject to certain conditions, including the following:
minimum acceptance level of at least 95% of Iveco's common shares, which will be reduced to 80% if Iveco adopts the Post-Offer Demerger and Liquidation resolutions at the EGM;
the sale of the companies of Iveco's defence business having been completed ultimately on 31 March 2026 (or the spin-off of Iveco's defence business having been completed ultimately on 1 April 2026 in case completion of the sale does not occur prior to or on 31 March 2026);
relevant merger control, foreign direct investment, EU Foreign Subsidies Regulation and financial regulatory clearances having been obtained and remaining in full force and effect.
For further information in respect of the Offer Conditions and other aspects of the Offer, please refer to the 102 Notice available, inter alia, on the website of Tata Motors at www.tatamotors.com and on the website of Iveco Group at www.ivecogroup.com.
Acquisition of 100% and delisting
The Offer is aimed at acquiring 100% of Iveco's common shares with a subsequent delisting of Iveco Group from Euronext Milan. Both companies believe that having Iveco operate as a wholly owned subsidiary is key to the sustainable success of Iveco’s business and long-term value creation. The Offeror will be able to achieve full ownership of Iveco through a pre-agreed transaction (the "Share Sale") upon the Offeror reaching 80% in the Offer. Further information can be found on the websites of Tata Motors at www.tatamotors.com and Iveco Group at www.ivecogroup.com.
Non-Financial Covenants
Iveco and the Offeror have agreed to a robust set of non-financial covenants in respect of, amongst others, employees, organisation, governance and the overall strategy, including other non-financial matters summarised below. These non-financial covenants (the “Non-Financial Covenants”) are committed for a period of two years after the settlement of the Offer.
Upon successful completion of the offer, it is envisaged that two (2) members of the Iveco Board will serve as independent board members (the "Independent Board Members") and will monitor compliance with, amongst other things, the Non-Financial Covenants.
The Non-Financial Covenants (NFC) shall be set out in full in the Offer Document and include:
Strategy and identity
The Offeror respects and supports Iveco Group’s business strategy and will support Iveco to realise and accelerate this while collaborating to ensure business growth. Iveco Group’s business shall remain substantially intact and contractual capital expenditures (CAPEX) commitments shall be respected. The Iveco Board will continue to drive decisions for long-term growth and maintaining the competitiveness of the business. The Offeror is committed to respecting and maintaining Iveco Group's corporate identity, integrity, core values, and culture as well as Iveco's key brands, trademarks, and logos.
Iveco Group’s headquarters will remain in Turin, Italy. The Offeror is committed to the long-term development of the combined group and shall not implement any material restructurings or close any plants or factories owned or used by Iveco Group as a direct consequence of the combination and, in any case, during the period of the NFC.
Employees
The Offeror will respect the existing rights and benefits of the employees of Iveco Group, including those outlined in the relevant employment and pension agreements and plans as well as existing arrangements with employee representative bodies.
The Offeror does not envisage any reduction of the workforce of Iveco Group as a direct consequence of the combination. The Offeror will ensure it fosters a culture of excellence, where qualified employees are offered attractive training and career progression.
Governance and ESG
Iveco Group, together with its subsidiaries, will continue to have its own operating and reporting structure, with the Iveco Board managing the Iveco Group and its businesses. Whilst the transaction per-se does not have any impact on the production sites, customer contracts (including with local transport authorities in Iveco’s markets) or current employment levels as there is substantially no overlap in portfolio or geographical footprint, the Board of Iveco will continue to drive decisions for long-term growth and the competitiveness of the business.
The Offeror supports Iveco Group’s commitment to ESG, as set out in the Sustainability Statement of the 2024 Annual Report, the 2024 Sustainability in Action report and 2024 Community Empowerment in Action report, which are available on Iveco Group's website.
Iveco Financing
The Offeror commits that the operations of Iveco Group will remain prudently capitalised and financed to safeguard the continuity and sustainable success of the business and the execution of its strategy.
Indicative timetable
The Offeror expects to submit a request for approval of the Offer Document to Consob in the next 20 calendar days. Until the Offer Document is published, reference is made to the 102 Notice for any further information in relation to the Offer.
Iveco Group will hold the EGM at least six Dutch business days prior to the closing of the acceptance period of the Offer to inform the shareholders about the Offer and to adopt the resolutions relating to the Offer.
Iveco Group and The Offeror shall seek to obtain the required merger control, foreign direct investment, EU Foreign Subsidies Regulation and financial regulatory clearances as soon as practicable.
It is expected that completion of the sale of the companies of Iveco’s defence business will occur ultimately on 31 March 2026. If the sale of the companies of Iveco's defence business does not complete on or before 31 March 2026, Iveco's defence business will be spun-off in a newly listed entity, so that the Offer can close as foreseen. As said, the Offer is conditional on the separation of this business.
Based on the required steps and subject to the necessary approval of the Offer Document, Iveco Group and the Offeror anticipate that the Offer will close in Q2 2026.
Advisors
In connection with the combination, on behalf of Iveco Group, Goldman Sachs is acting as exclusive financial advisor, De Brauw Blackstone Westbroek and PedersoliGattai are acting as legal counsel and Maisto e Associati is acting as Italian tax counsel.
On behalf of Tata Motors, Morgan Stanley India Company Private Limited is acting as exclusive financial advisor. Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc and MUFG Bank, Ltd., have jointly underwritten the financing facilities of EUR 3.8 billion for funding of the proposed offer. Clifford Chance is acting as legal counsel and PwC and Kearney have helped with the Due Diligence.
Greenberg Traurig is acting as independent legal advisor to the independent non-executive members of the Iveco Board.
