Headlines
Tata Motors to buy Italy's Iveco after defence unit disposal
Published by Global Banking and Finance Review
Posted on July 30, 2025
4 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on July 30, 2025
4 min readLast updated: January 22, 2026
Tata Motors will acquire Iveco for €3.8 billion after selling its defence unit to Leonardo, enhancing its European commercial vehicle market presence.
By Giulio Piovaccari and Giulia Segreti
MILAN/ROME (Reuters) -India's Tata Motors will buy Iveco in a deal valued at 3.8 billion euros ($4.36 billion), the companies said on Wednesday, after the Italian truckmaker separately agreed to sell its defence business to Leonardo.
Boosting its commercial vehicles business, Tata will launch an all-cash tender offer for Iveco's shares, subject to the defence business sale, at 14.1 euros per share.
Iveco, which also makes buses and engines, is controlled by Italy's Agnelli family through its investment company Exor, which currently owns a 27.1% stake in the Turin-based group, with 43.1% of voting rights. Exor has agreed to hand its stake in Iveco to Tata.
"The offer would bring together two businesses with highly complementary product portfolios and capabilities and with substantially no overlap in their industrial and geographic footprints," Tata and Iveco said.
The combined group would have a significant global presence, with sales of over 540,000 units per year and revenues of around 22 billion euros.
Iveco, which last year made 74% of its revenues in Europe, could prove a good fit for Tata Motors. The Indian manufacturer controls Jaguar Land Rover in the passenger car sector, but has virtually no presence, nor manufacturing footprint, in the European commercial vehicle industry.
The smallest among Europe's leading truck makers - a market led by Volvo, Daimler and Traton - Iveco has often been seen as a potential M&A candidate. However, its presence in defence made a deal more difficult.
Milan-listed shares in Iveco rose around 25% since mid-July, when Reuters first reported Tata was in talks to acquire the company. They closed at 19.01 euros on Wednesday.
Iveco employs around 36,000 people, including 14,000 in Italy, and the deal with Tata is expected to draw scrutiny from the Italian government.
Officials from Prime Minister Giorgia Meloni's administration said the government supported 'quality foreign investment' but would closely follow the deal to ensure the protection of jobs, strategic resources and the wider production chain.
DEFENCE SALE
State-controlled group Leonardo has agreed to buy Iveco's IDV defence unit, giving the business an enterprise value of 1.7 billion euros.
The sale of the defence business - with 2024 core profits of 108 million euros and 2,000 employees in Italy and abroad - cleared the way for Tata's takeover bid for the rest of Iveco.
The defence transaction is expected to be completed in the first quarter of 2026, subject to regulatory approvals.
The plan is for Iveco to be delisted, meaning the loss of another blue chip company from the Milan exchange.
Leonardo's German partner Rheinmetall said later on Wednesday it was in exclusive talks with Leonardo to acquire IDV's military trucks operation.
The IDV deal is in line with Leonardo's broader strategy of consolidation in the defence sector and will allow the group to address the increasing demand in Europe for land vehicles.
IDV is a key supplier for the Italian army, but also won military contracts in countries including Britain, the U.S. and Brazil.
"The acquisition of IDV gives Leonardo a unique possibility to offer both tracked and wheeled platforms," Leonardo CEO Roberto Cingolani told an analyst call.
Cingolani also said Leonardo had initially planned to buy IDV jointly with Rheinmetall, but then decided to press on alone to close the deal by the end of July.
With Leonardo alone it was "simpler and more convenient," Cingolani said.
Iveco said that, once the IDV deal is completed, it planned to distribute its net proceeds to shareholders via an extraordinary dividend. ($1 = 0.8717 euros)
(Additional reporting by Matthias Inverardi and Giuseppe Fonteediting by Alvise Armellini and Keith Weir)
Tata Motors will buy Iveco in a deal valued at 3.8 billion euros ($4.36 billion).
Tata Motors will launch an all-cash tender offer for Iveco's shares at 14.1 euros per share.
The sale of Iveco's IDV defence unit to Leonardo clears the way for Tata's takeover bid for the rest of Iveco.
The defence transaction is expected to be completed in the first quarter of 2026, subject to regulatory approvals.
The Italian government supports quality foreign investment but will closely monitor the deal to ensure job protection and strategic interests.
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