Tata Motors will buy Italian company for 40 thousand crores

Tata Motors is going to execute its biggest acquisition till date. Tata is acquiring Italian commercial vehicle company Iveco. This deal will be for around Rs 40 thousand crores.

Tata Motors, one of the largest car companies in India, is going to make its biggest deal till date. Tata Motors is going to acquire Italian truck manufacturing company Iveco for 4.5 billion US dollars i.e. around Rs 40 thousand crores. Iveco is a company of Agnelli Group. Earlier, Tata Motors' acquisition of Jaguar Land Rover (JLR) in the year 2008 was the biggest deal till date.

According to media reports, the formal announcement of the acquisition can be made by Wednesday. The boards of Tata Motors and Iveco are meeting on Wednesday to approve a big deal. This information has been given by some sources on the condition of anonymity, as the talks are still going on at a private level. Iveco said on Tuesday that it is in talks about two separate deals related to its defense business and the rest of the company.

This is how Tata will buy the stake
The company said that the board is carefully reviewing and evaluating all aspects of these potential deals. However, Tata Motors did not give much information about the deal. According to people with information, Tata Motors is not buying this Iveco directly from Agnelli. Tata will buy 27.1% stake from Exor, an investor in the Agnelli family. It will launch a tender offer for small shareholders to buy the remaining stake. Exor also has 43.1% voting rights in Iveco.

The relationship with Tata is old
The board of Exor and Iveco is liking Tata for the deal, because the relationship between the Agnelli family and the Tata Group is old, and former chairman Ratan Tata has also been fond of automobiles. Tata also previously had a joint venture in India with Fiat Motors (Agnelli's flagship company). The Agnelli family also holds large stakes in Ferrari and Stellantis (an auto group with many companies including the Fiat brand). According to sources, the talks have been going on for the last one and a half months and have gained momentum in recent weeks. Both the parties have signed an exclusivity agreement for the talks, which will end on August 1.