Tata Motors shares down 0.5%: Auto major to acquire Iveco for ₹38,240 crore; check the fine print

Shares of the company in the early deals were trading half a percent lower at ₹665.80 apiece on Thursday, July 31. The stock was in the red on Wednesday as welll following the report around the development. The company confirmed the deal on Wednesday night.

In the automotive space, the company's largest acquisition to date is its buyout of British brand Jaguar Land Rover for $2.3 billion in 2008.

The executive committee of the company's board has approved the acquisition of 100% of the common shares of Iveco Group NV through an all-cash voluntary tender offer (excluding the defence business), subject to all regulatory, statutory, and all other necessary approvals, the Mumbai-based auto major said in a regulatory statement.

Tata Motors and Iveco Group said 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 transaction seeks to acquire 271,215,400 common shares through a voluntary tender offer, which is subject to a minimum acceptance level of 80% of the shares tendered, it added.

A cash consideration of euro 14.1 per tendered share is proposed for Iveco Group N.V. (excluding the defence business), the company stated.

The offer represents a total consideration of around 3.8 billion euro for Iveco Group, excluding Iveco's defence business and the net proceeds from the defence business separation, it said.

The transaction is expected to close by April 2026, subject to all necessary formalities and regulatory clearances, the company stated.

What companies said

Commenting on the transaction, Tata Motors Chairman Natarajan Chandrasekaran said, "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 Tata Motors' ability to invest boldly, he said, adding, "I look forward to securing the necessary approvals and concluding the transaction in the coming months."

Suzanne Heywood, Chair of Iveco Group, said, "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 the industrial footprint of Iveco Group as a whole," she added.

Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of around 22 billion euros (over ₹2,20,000 crore) split across Europe (50%), India (35%), and the Americas (15%) with attractive positions in emerging markets in Asia and Africa, the filing said.

"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," it said, adding, By preserving each group's industrial footprint and employee communities, this complementarity is also expected to foster a smooth and successful integration process.

Tata Motors Executive Director Girish Wagh said the combination is a strategic leap forward in the group's ambition to build a future-ready commercial vehicle ecosystem.

About Iveco Group

Iveco Group N.V. is a Dutch public limited company incorporated on June 16, 2021, headquartered in Turin, Italy.

The group designs, manufactures, and sells trucks, commercial and defence vehicles, buses, and powertrains; it also provides financial services to its dealers and customers.

The transaction intends to acquire the non-defence business comprising trucks, buses, powertrains, and financial services.

Tata Motors' acquisition of Iveco Group is the second biggest acquisition of the Tata Group after the $12 billion takeover of Anglo-Dutch giant Corus Group Plc in 2007.

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