In a strategic move to expand its global footprint in the commercial vehicle sector, India’s Tata Motors has announced the acquisition of Italian truck manufacturer Iveco in a deal valued at €3.8 billion (around RM19.4 billion). The agreement, finalised on Wednesday, marks a significant milestone for both companies and follows a separate transaction in which Iveco’s defence division, IDV, will be sold to Italian aerospace and defence giant Leonardo.
The all-cash transaction will see Tata launch a tender offer for all Iveco shares at €14.10 apiece, contingent upon the successful completion of the defence business sale. The acquisition is aimed at integrating two companies whose commercial vehicle operations are said to be highly complementary, with minimal industrial or geographic overlap.
Tata’s offer has received the backing of Exor, the holding company of Italy’s influential Agnelli family. Exor currently controls a 27.1% stake in Iveco, with 43.1% of the company’s voting rights. It has agreed to transfer its entire stake to Tata, effectively facilitating the acquisition.
Following the merger, the combined group is expected to command a substantial presence in the global commercial vehicle industry, with annual sales exceeding 540,000 units and total revenues approaching €22 billion. While Tata Motors already owns British luxury automaker Jaguar Land Rover, its presence in the European commercial vehicle sector has been virtually non-existent until now. Iveco’s strong base in Europe—where 74% of its revenues were generated in 2023—makes it a strategic fit for Tata’s ambitions to expand beyond Asia.
Iveco, the smallest among Europe’s established truck manufacturers, has long been viewed as a potential acquisition target, though its involvement in the defence sector had complicated previous merger opportunities. That obstacle has now been addressed through a separate agreement in which state-controlled Leonardo will acquire IDV, Iveco’s defence arm, in a deal valuing the unit at €1.7 billion.
IDV employs roughly 2,000 people and recorded core earnings of €108 million in 2024. The transaction is expected to be finalised by the first quarter of 2026, pending regulatory approvals. The sale of IDV not only clears the way for Tata’s full acquisition of Iveco but also aligns with Leonardo’s wider strategy to consolidate its position in Europe’s defence market, especially in the area of land-based military vehicles.
Leonardo CEO Roberto Cingolani explained that the company initially considered a joint purchase of IDV with German defence contractor Rheinmetall, but ultimately proceeded independently to ensure swift closure. Leonardo now intends to offer both tracked and wheeled military platforms, significantly enhancing its product portfolio.
Rheinmetall, meanwhile, confirmed that it is in exclusive talks with Leonardo to acquire IDV’s military truck operations.
Iveco’s delisting from the Milan stock exchange is now anticipated, resulting in the departure of yet another blue-chip industrial name from the Italian bourse. The Italian government, while expressing support for high-quality foreign investment, is expected to monitor the developments closely, with particular attention to employment, strategic assets, and the domestic supply chain. Iveco currently employs around 36,000 people worldwide, including 14,000 in Italy.
Following the finalisation of the IDV sale, Iveco has indicated its intention to distribute the net proceeds to shareholders through a special dividend. The company’s stock has surged by approximately 25% since mid-July, when news of Tata’s interest first emerged. As of Wednesday, shares closed at €19.01.
With this acquisition, Tata Motors positions itself as a new force within Europe’s commercial vehicle sector, while Iveco is set to benefit from increased investment and broader global reach under its new ownership.
