Mumbai, July 30
Following reports that Tata Motors is in advanced negotiations to purchase the truck division of Italy's Iveco Group in a possible $4.5 billion deal, the company's shares experienced significant pressure on Wednesday. They fell by almost 4 per cent in early trading.
Tata Motors' stock was down 3.08 per cent from the previous close at Rs 671.85, as of 11:23 A.M. The drop is a result of investor apprehension about the scope and consequences of what might turn out to be the second-largest foreign acquisition for the Tata Group after its $12.9 billion acquisition of Corus Steel in 2007.
The talks with Iveco, which is owned by the Agnelli family, are reportedly centred on purchasing its Defence and commercial truck businesses.
Iveco has admitted to looking into the possibility of selling its industrial vehicle division, but no firm decision has been made as of yet.
However, it has been reported that the deal may receive Board-level approvals as early as today.
If completed, the deal would be Tata Motors' largest acquisition since its 2008 $2.3 billion acquisition of Jaguar Land Rover and could greatly increase the company's presence in the global commercial vehicle market.
The timing is notable, as Tata Motors is spinning off its commercial vehicle business into a separate entity, a process expected to conclude by December 2025.
In India, that division has a 30 per cent market share for light commercial vehicles (LCVs) and a 49 per cent market share for heavy commercial vehicles (HCVs).
It generated Rs 75,000 crore in revenue in the previous fiscal year.
The foundation of Iveco's industrial operations is its truck business, which generates 70 per cent of total industrial revenue. The company's bus and powertrain divisions each contribute 15 per cent.
Iveco maintained an 8-9 per cent presence in the medium and heavy truck segment and a 13.3 per cent share in the European LCV market in 2024.
— IANS
Reader Comments
Exciting times for Indian auto sector! 🚛 If this deal goes through, Tata Motors will become a global player in commercial vehicles. Remember how JLR acquisition worked wonders - this could be similar. Long term vision matters more than short term stock fluctuations.
The timing seems strategic with the commercial vehicle spin-off. Tata is clearly building a global commercial vehicle powerhouse. But integration challenges are real - different work cultures, European labor laws etc. Hope they've done proper due diligence.
As an investor, I'm concerned about the debt this might add to Tata Motors' books. The company just turned profitable after years of struggles. Is this the right time for such an aggressive expansion? Maybe focus on strengthening domestic operations first?
Desi company buying foreign brands always makes me proud! 🇮🇳 Tata has shown they can turn around foreign acquisitions (JLR success story). This could give Indian engineers access to European technology. Market will stabilize once details are clear.
Interesting that they're focusing on defense vehicles too. With India's push for defense indigenization, this acquisition could help Tata Motors become a major defense supplier. Smart move beyond just commercial vehicles!
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