Tata Motors is in the process of signing a deal to acquire Italian truck manufacturer Iveco. The deal with the Agnelli family (the main shareholder of the brand) will involve a transaction of 3.8 billion euros (around $4.3 billion), resulting in the creation of a global player in the commercial vehicle business with a vast reach.
The deal surpasses the last significant acquisition by Tata Motors, which was in 2008, involving a transaction of $2.3 billion for Jaguar Land Rover (JLR). Reports suggest that this acquisition will become the Tata Group's second-largest after Corus and the largest within its automotive sector.
Also Read: Qualcomm Showcases Automotive Strength At First-Ever Snapdragon Auto Day
The agreement, announced jointly by Tata Motors and the Iveco Group on July 30, will be carried out through a voluntary tender offer made by TML CV Holdings PTE LTD, a newly created Dutch-incorporated entity fully owned by Tata Motors.
Iveco's defense division will be excluded from the arrangement with Tata Motors. The offer aims at all issued common shares of the Iveco Group following the separation of its defense division, a condition that is required for the acquisition to move forward.
What is Iveco?
Iveco officially came into existence on January 1, 2022, after splitting from CNH Industrial. Although it is incorporated as a Dutch company with its legal seat in Amsterdam, its core operations are based in Turin, Italy, where its headquarters are situated.
Why is Iveco Important for Tata Motors?
Iveco is important for Tata Motors due to its vast international reach. The company operates on five continents and has a significant presence in over 30 countries. From the well-established markets of Western Europe, such as France, Germany, Italy, and Spain, to the emerging economies of Africa, including South Africa, Ethiopia, and Ivory Coast, and strong positions in South America, Iveco provides Tata Motors with immediate access to markets that would otherwise require years to enter independently. Additionally, Iveco already has a presence in India, which should aid a smoother integration with Tata Motors' current operations.