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Tata Motors is on the verge of acquiring Italian truck manufacturer Iveco for $4.5 billion from its principal shareholder
Tata Motors Iveco Deal
Tata Motors is on the verge of acquiring Italian truck manufacturer Iveco for $4.5 billion (approximately €3.9 billion) from its principal shareholder, the Agnelli family, in what would mark the Tata Group’s second-largest acquisition ever, after the Corus deal. The Economic Times reported this, citing people familiar with the matter.
The proposed transaction would also be Tata Motors’ largest acquisition to date, surpassing its 2008 purchase of Jaguar Land Rover for $2.3 billion. According to the ET report, a formal announcement could be made as early as Wednesday, with both Tata Motors and Iveco boards scheduled to meet to approve the deal.
Iveco Confirms Ongoing Discussions
Iveco confirmed on Tuesday that it is in “ongoing, advanced” discussions involving two separate transactions related to its defence division and the rest of the company. While the company did not provide specifics, sources revealed to ET that Tata Motors plans to acquire a 27.1% stake in Iveco from Exor, the Agnelli family’s investment holding company, followed by a tender offer for the remaining shares.
Notably, Exor controls 43.1% of the voting rights in the company. The defence segment, however, is being carved out from the deal and will not be part of Tata Motors’ acquisition.
Italian Government’s Concerns and Deal Structure
ET reported that the Italian government previously blocked a 2021 bid by China’s FAW to acquire Iveco, citing national security concerns due to the firm’s defence division. Analysts believe the decision to divest the defence unit locally may ease regulatory hurdles for Tata Motors.
The acquisition will be executed via a Dutch entity wholly owned by Tata Motors, the report added. Morgan Stanley is advising Tata Motors, while Goldman Sachs and Clifford Chance are representing Exor and Iveco.
Market Response
Shares of Iveco surged 7.4% intraday on Tuesday on speculation surrounding the transaction. The stock has more than doubled in 2025, valuing the company at around $6.15 billion.
The Economic Times notes that the Agnellis are longstanding allies of the Tata Group. In the past, Tata had a joint venture with Fiat Motors in India. The Agnellis also control automotive major Stellantis and hold a significant stake in Ferrari.
A successful acquisition would expand Tata Motors’ presence in Europe and Latin America, granting access to Iveco’s portfolio of commercial vehicles, buses, powertrains, and specialty vehicles. Currently, 74% of Iveco’s revenues come from Europe. In contrast, Tata Motors’ CV division—soon to be listed independently—earns 90% of its revenues from India.
In FY25, Tata Daewoo (acquired in 2004) reported revenues of ₹5,394 crore, down 11% YoY, with operating margins falling to 1% from 4%. The Iveco deal could potentially triple Tata’s commercial vehicle revenues to over ₹2 lakh crore, although margin pressures persist. Tata Motors’ EBIT margin is at 9.1%, compared to Iveco’s 5.6% adjusted margin.
IPO Plans and Financials
Iveco management had previously forecast that its industrial business—including the soon-to-be-divested defence unit—could generate €400–450 million in free cash flow in calendar year 2025. According to ET, the exclusivity agreement between Tata Motors and Exor is set to expire on August 1.
Reuters was the first to report on the Tata-Iveco discussions earlier in July. If completed, the deal would not only strengthen Tata’s global footprint but also mark a significant shift in Europe’s truck manufacturing landscape.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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