Mumbai, India / Turin, Italy – Tata Motors announced the acquisition of the Italian producer of commercial vehicles Iveco Group on Thursday 1 August for an amount of € 3.8 billion (US $ 4.4 billion). The deal is seen as the most ambitious international step of the Indian company since the acquisition of Jaguar Land Rover in 2008.
The transaction is structured as a Voluntary public takeover bid of € 14.1 per sharewhich amounts to a premium of 41% compared to the recent average of the Iveco share. Thanks to this deal, Tata strengthens its position on the European market for trucks and buses and becomes one of the world’s most geographically diversified producers of commercial vehicles.
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However, the acquisition does not include the defense division of Iveco, which is sold separately to the Italian aerospace company Leonardo for € 1.7 billion. This part remains under national control, in accordance with the strategic investment rules of the Italian government.
Strategic expansion outside India
Tata Motors is the market leader in commercial vehicles in India, with a General market share of 39.1% and more than 53% in the heavy vehicles segment. Yet about 90% of sales in this segment are still dependent on the Indian market.
“The acquisition of Iveco means an important step forward for Tata Motors. It enables us to reduce dependence on the domestic market and to operate internationally,” said a company spokesperson.
Synergy between markets and income
Iveco achieved a turnover of € 15.3 billionof which about 75% in Europe. The company is also active in Latin America and North America. Due to the merger, the combined group is expected to be annually € 22 billion in income generate and more than 540,000 vehicles to sell. The geographical distribution of sales will be approximately 50% in Europe, 35% in India and 15% in North and South America amounts.
With this acquisition, TATA Motors will compete with industrial giants such as Volvo, Daimler a Scaniawhich uses a new chapter in the global battle for sustainable and technologically advanced commercial vehicles.
Strategic support and strong financing
Of Familie Agnellithe via her holding Exor More than 43% of the voting rights in Iveco owned its support for the deal. The financing is provided by a consortium led by Morgan Stanley and the Japanese MUFG Bankwhich means that Tata has sufficient financial strength to completely complete the takeover in cash, without dilution of shares.
The completion of the acquisition is expected in the coming months. TATA Motors thereby repositions itself as a global player in the market for commercial vehicles, ready to take on the challenges and opportunities of an increasingly competitive and globalized market.
Source and images: Iveco. This content was created with the help of AI and has been checked by the editors.
