Iveco sells vehicle unit to Tata, defence business to Leonardo

Italy’s Iveco Group has agreed to sell its commercial vehicles unit to India’s Tata Motors and its defense business to Leonardo, in deals worth 3.8 billion euros and 1.7 billion euros respectively.

Leonardo, an Italy-headquartered provider of security and advanced technology systems for applications in the aerospace, defense and security sectors, has signed an agreement to acquire Iveco Defence for a total enterprise value of €1.7 billion. The transaction will be financed through available cash resources. 

This strategic acquisition marks a significant step in Leonardo’s plan to strengthen its role as a leading, fully integrated Original Equipment Manufacturer (OEM) in the land defence domain. The acquisition further enhances the Group’s comprehensive portfolio of solutions for defence and security, covering both tracked and wheeled platforms, Leonardo said in a media release.

“The acquisition of Iveco Defence represents a key milestone in the execution of our inorganic growth strategy and supports the full implementation of our Industrial Plan,” said Roberto Cingolani, CEO and General Manager of Leonardo. “This transaction reinforces Leonardo’s position as a reference player in the European land defence market, a segment expected to experience sustained growth in the coming years.” 

The acquisition will also boost joint commercial positioning, leveraging the complementary nature of the two companies’ sales networks and the ability to offer integrated solutions in high-potential markets, Leonardo said.

“This agreement propels Iveco Group’s Defence Business into its proper dimension as a key contributor alongside Leonardo in the creation of a focused, world-class player in land defence activities,” said Olof Persson, CEO of Iveco Group, according to a media release issued by Iveco. “Our colleagues in the Defence Business — who have done a tremendous job in building this business, responding to the growing need both for land defence vehicles and the technologies we have developed — will become part of a group with the scale and integrated capabilities to compete on all levels and for all platforms, with all the positive potential for innovation and continuous development.”

Iveco employs around 36,000 people, including 14,000 in Italy.

Meanwhile, Tata Motors announced that its Executive Committee approved the acquisition of 100% of the common shares of Iveco Group through an all-cash tender offer.  

“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,” said Natarajan Chandrasekaran, Chairman of Tata Motors, according to a report by CNBC TV18. “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.”