TATA MOTORS will buy Italy's Iveco Group for £3.2 billion ($4.4bn) in a bid to create a "global champion" in the commercial vehicles sector, the two companies said Wednesday (30).
The deal excludes Iveco's defence division for armoured vehicles, which is to be sold to Italian defence and aerospace group Leonardo, in a £1.44bn deal announced earlier Wednesday.
The combined company after Tata's takeover aims to sell around 540,000 vehicles a year for total annual revenues of £18.7bn, of which half would come from Europe, 35 per cent from India and 15 per cent from the Americas.
Tata and Iveco -- which also makes engines and buses -- said in a joint statement there was "no overlap in their industrial and geographic footprints, creating a stronger, more diversified entity" which would use a shared strategic vision to drive long-term growth.
The deal is expected to close in the first quarter of 2026, underscoring the status of Tata in Europe, with Jaguar Land Rover notably a wholly owned subsidiary of Tata Motors.
"The reinforced prospects of the new combination are strongly positive in terms of the security of employment and industrial footprint of Iveco Group as a whole," Iveco's chairwoman Suzanne Heywood said in the statement.
For Natarajan Chandrasekaran, chairman of Tata Motors, "this is a logical next step following the demerger of the Tata Motors Commercial Vehicle business and will allow the combined group to compete on a truly global basis with two strategic home markets in India and Europe.
"The combined group's complementary businesses and greater reach will enhance our ability to invest boldly. I look forward to securing the necessary approvals and concluding the transaction in the coming months," he added in the statement.
Iveco Group's CEO Olof Persson said the merger was "unlocking new potential to further enhance our industrial capabilities, accelerate innovation in zero-emission transport, and expand our reach in key global markets."
He added: "This combination will allow us to better serve our customers with a broader, more advanced product portfolio and deliver long-term value to all stakeholders."
Separately, Iveco's armoured vehicles unit will be sold to Leonardo, whose chief Roberto Cingolani said the move would make it a "reference player in the European land defence market".
Leonardo has announced it plans to integrate its electronic systems, including new-generation combat sensors, into Iveco Defence vehicles to "guarantee optimal effectiveness of operational solutions offered".
(AFP)
