A major new global player in the commercial vehicle market will be established when Indian giant Tata Motors takes ownership of the Iveco Group.

The two companies recently announced they have reached agreement to create a commercial vehicles group with the reach, product portfolio and industrial capability to be a leading global competitor.

Completion of the deal is conditional on the separation of Iveco Group’s defence business. The likely timeline for the deal to be complete is the first half of 2026.

The Tata Motors offer to Iveco shareholders is valued at Euro3.8 billion (NZ$7.4b) and would bring together two businesses with highly complementary product portfolios and capabilities, and with substantially no overlap in their industrial and geographic footprints.

Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of about €22bn split across Europe (50%), India (35%) and the Americas (15%) with attractive positions in emerging markets in Asia and Africa. Combined the new entity would have global sales of about 540,000 units per year.

“By joining forces with Tata Motors, we are unlocking new potential to further enhance our industrial capabilities, accelerate innovation in zero-emission transport, and expand our reach in key global markets,” says Olof Persson, CEO of Iveco Group.

The Iveco Group Board of Directors unanimously and fully supports the Offer and recommends the Offer for acceptance by the shareholders of Iveco. Also, Exor N.V., Iveco Group’s largest shareholder, has irrevocably committed to support the Offer and tenders its shareholding representing approximately 27.06% of Iveco Group’s common shares and 43.11% of all voting rights.

“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,” says Natarajan Chandrasekaran, Chairman of Tata Motors.

“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.”

Tata Motors is based in Mumbai and was founded in 1948 as a locomotive manufacturer. It has numerous joint ventures and subsidiaries in both passenger car and commercial vehicle sectors and since 2008 the Indian company has owned Jaguar Land Rover, purchasing the brands from Ford Motor Company.