Tata Motors and Iveco Group Join Forces to Form Global Commercial Vehicles Leader

In a landmark deal set to reshape the global commercial vehicles industry, Tata Motors Limited and Iveco Group N.V. have announced a strategic agreement to merge their commercial vehicle businesses. The move aims to create a powerhouse in sustainable transport solutions, combining robust portfolios, manufacturing strengths, and geographic reach.

The merger will be facilitated through a voluntary tender offer by TML CV Holdings PTE LTD, a subsidiary wholly owned by Tata Motors. The offer, priced at €14.1 per share, values Iveco Group (excluding its defence business) at approximately €3.8 billion. The transaction is expected to close in the first half of 2026, following regulatory approvals and the separation of Iveco’s defence division.

A Global Commercial Vehicles Champion

The merged entity will become a formidable global player with combined annual sales of over 540,000 units and revenues of around €22 billion (INR 2.2 lakh crore). With operations spread across Europe (50%), India (35%), and the Americas (15%), the company is well-positioned to address both mature and emerging markets.

The partnership will integrate Tata Motors’ commercial vehicle business, a market leader in India, with Iveco’s European strength and innovation capabilities, particularly in alternative powertrains and mobility technologies. Together, the companies aim to accelerate advancements in zero-emission transport, strengthen supply chains, and develop innovative, customer-centric products.

Strategic Complementarity with Global Reach

According to Tata Motors Chairman Natarajan Chandrasekaran, this move is a “logical next step” after the recent demerger of Tata Motors’ commercial vehicle unit. “With this combination, we are creating a group with two strategic home markets — India and Europe — ready to compete globally,” he stated.

Olof Persson, CEO of Iveco Group, highlighted the operational synergies: “This combination unlocks new potential to accelerate innovation, expand market reach, and better serve our customers with a broader, more advanced product portfolio.”

The businesses have minimal industrial overlap, ensuring that integration preserves existing jobs, plant locations, and customer contracts. The two-year non-financial covenant agreement post-merger guarantees operational stability and continuity.

Financial Highlights of the Offer

• Offer Price: €14.1/share (cum dividend, excluding defence business dividend)
• Extraordinary Dividend Estimate: €5.5–€6.0/share from defence business sale
• Premium Offered: 22–25% over VWAP (3-month average price as of July 17, 2025)
• Total Consideration: ~€3.8 billion (excluding defence division)

Exor N.V., the largest shareholder in Iveco Group, holding 27.06% of shares and 43.11% of voting rights, has committed to tender its shares and support the merger. Iveco’s Board of Directors has unanimously approved and recommended the offer to shareholders.

Strong Governance and Long-Term Strategy

Post-merger, Iveco Group’s headquarters will remain in Turin, Italy, and its core brands, workforce, and culture will be preserved. The Board will include independent directors to ensure compliance with governance and ESG guidelines.

The combined group aims to deliver long-term value by spreading investments across broader platforms, driving capital efficiency, and reducing volatility in the commercial vehicle segment. Iveco’s powertrain division, FPT Industrial, will continue to play a central role in innovation and product development.

Road Ahead: Closing by 2026

The sale of Iveco’s defence business is expected to close by March 31, 2026, with the final merger anticipated shortly after in Q2 2026. If the sale is not completed by then, the division will be spun off into a separately listed entity to enable timely closure of the offer.

This transformational deal positions Tata Motors and Iveco Group at the forefront of global mobility solutions — combining expertise, innovation, and scale to meet the challenges of a rapidly evolving transportation landscape.