Tata Motors to Acquire Iveco for €3.8 Billion

Indian automaker Tata Motors Limited has announced the acquisition of Iveco, the Italian commercial vehicle manufacturer, in a deal valued at €3.8 billion. The move aims to strengthen Tata’s commercial vehicle expertise and expand its presence in key growth markets, particularly India. As part of the transaction, Iveco’s defense division will be spun off and sold separately.

From Fiat Origins to Global Player

Iveco was formed in 1975 through the merger of Fiat’s truck division, Officine Meccaniche (Italy), Automobiles Unic (France), and Magirus-Deutz (Germany), under the leadership of the Fiat Group. Until 1980, 20% of Iveco shares were held by Klöckner-Humboldt-Deutz, the parent company of Magirus-Deutz, before being sold to Fiat.

A Strategic Global Combination

The merger will unite Iveco and Tata Motors’ commercial vehicle operations, generating around €22 billion in annual revenue across Europe (50%), India (35%), and the Americas (15%). Combined annual sales are expected to exceed 540,000 units, with strong positioning in emerging markets across Asia and Africa. Iveco’s industrial arm, Fiat Powertrain Technologies (FPT), sees significant growth potential in stationary engines, particularly with enhanced market access through Tata’s local expertise and brand recognition.

Deal Structure

The acquisition will be executed via a voluntary public offer to Iveco shareholders, at €14.10 per share—a 23% premium over the weighted three-month average. Financial experts describe the price as in line with market standards.

Defense Business Divestment

Under the agreement, Iveco’s defense operations will be sold to French defense group Leonardo. Iveco, like Mercedes and MAN, produces base vehicles, powertrains, and chassis for military use, but only the civilian business will transfer to Tata. The move follows Iveco’s 2024 sale of its loss-making but historic firefighting equipment division.

Global Market Strategy and Future Outlook

This acquisition marks a key milestone in Tata Motors’ strategy to become a global commercial vehicle powerhouse. With combined expertise and expanded product portfolios, Tata and Iveco are positioned to accelerate growth across emerging and developed markets alike. The company aims to innovate further in electrification and sustainable transport solutions, aligning with global trends towards cleaner mobility.