Tata launches €3.82 billion Iveco takeover that could combine two major African truck networks

• Tata Motors has formally opened its €3.82 billion cash offer for Iveco’s commercial-vehicle business.
• The acquisition would create a manufacturer selling more than 590,000 vehicles annually.
• Both companies sell trucks and buses in Africa, while Tata has assembly operations in seven African countries.
• Neither company has disclosed how their African factories, dealerships or brands would be combined.

Tata Motors has formally launched its €3.82 billion offer for Iveco, moving closer to bringing two companies with extensive truck, bus and service networks in Africa under common ownership.

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    The *Financial Express* reported that the cash offer will open for shareholder acceptance on 7 September and run until 26 October, following approval from Italian market regulator Consob.

Tata is offering €14.10 for each Iveco common share and ultimately intends to acquire 100% of the company and delist it from the Milan stock exchange.

Iveco’s largest shareholder, Exor, has committed to tendering its 27.06% interest. Iveco’s board has also recommended that shareholders accept the proposal.

The transaction is principally presented as a combination of Tata’s strength in India and other emerging economies with Iveco’s larger European commercial-vehicle operation. Its African consequences, however, extend beyond the 14% of combined revenue expected from markets outside Europe, India and South America.

    **Two established African networks**

Tata says it has sold more than 340,000 commercial vehicles across sub-Saharan Africa and operates more than 320 sales and service locations.

Its wider African industrial network includes assembly operations in South Africa, Kenya, Nigeria, Senegal, Egypt, Morocco and Tunisia.

Iveco separately sells and supports light vans, heavy trucks, buses and construction vehicles in African markets. Its vehicles are used by transport companies, mines, building contractors, municipalities and emergency services.

Completion of the takeover would therefore give Tata control of overlapping product lines and distribution networks.

That could create efficiencies in procurement, financing, technology and spare-parts distribution. It could also force decisions about which brands, factories and dealerships receive new investment.

No such African restructuring has been announced.

    **Defence business is not included**

The transaction does not include Iveco’s defence operations.

Under the companies’ original agreement, completion depended on separating that business from the commercial-vehicle group.

Iveco subsequently transferred the IDV and ASTRA defence operations to Leonardo under a separate €1.7 billion transaction. Tata’s offer therefore covers the remaining truck, bus, powertrain and financial-services businesses.

The companies expect their combination to produce annual sales exceeding 590,000 vehicles and revenue of approximately €21 billion.

Tata has said Iveco will retain its headquarters in Turin. It has also made two-year commitments against closing major facilities or cutting jobs as a direct consequence of the takeover.

It is not yet clear how far those protections extend to assembly plants, distributors and employees outside Europe.