India's Tata Motors has officially confirmed its acquisition of Iveco Group for €3.8 billion. The all-cash deal transfers ownership of one of Europe’s most storied truck manufacturers to the Indian automotive giant, creating a new global player with significant reach across Europe, India, and the Americas.

Tata Motors will acquire Iveco through a voluntary public tender offer at €14.1 per share. The transaction, which has the unanimous backing of Iveco's board and its largest shareholder, Exor, is expected to be finalized in the first half of 2026, pending regulatory approvals.

The core of the deal involves merging Iveco Group's commercial vehicle operations with Tata Motors' own, forming a new entity with projected annual sales of approximately 540,000 units and combined revenues of €22 billion. This strategic combination is designed for global competition, with Natarajan Chandrasekaran, Chairman of Tata Motors, calling it a "logical next step" that provides the new group with "two strategic home markets in India and Europe".

The new company's operations will be geographically diversified: 50% in Europe, 35% in India, and 15% in the Americas, with additional presence in Asia and Africa. A key advantage highlighted by Tata is the minimal overlap between the two companies' product lines and geographic footprints, which is anticipated to facilitate a smooth integration without significant restructuring. 

As part of the agreement, Tata has committed to maintaining Iveco’s headquarters in Turin, Italy. Furthermore, no plant closures or workforce reductions are planned for at least two years following the deal's settlement, a move likely to ease concerns among employees and local stakeholders.

Notably, the acquisition excludes Iveco Group's defence business, which includes the IDV and ASTRA brands. In a parallel transaction, Iveco has agreed to sell this division to the Italian defence and aerospace company Leonardo for €1.7 billion. The separation of the defence arm is a condition of the main acquisition and is targeted for completion by March 31, 2026. Proceeds from the defence sale are expected to fund an extraordinary dividend for Iveco shareholders, estimated to be between €5.5 and €6.0 per share.

The acquisition news was released alongside Iveco's second-quarter 2025 financial results, which painted a picture of a company navigating a challenging market. Iveco reported a decline in year-on-year net revenues to €3.78 billion and a drop in adjusted net income from €182 million to €106 million.