On 30 July 2025, Tata Motors, a leading Indian automaker, announced its plan to acquire Iveco Group, a major European commercial vehicle manufacturer, for around €3.8 billion. This significant deal aims to combine the strengths of both companies to form a global powerhouse in the commercial vehicle sector. To enable this acquisition, Iveco Group divested its defence business, Iveco Defence Vehicles (IDV), to Leonardo, an Italian defence conglomerate, for €1.7 billion.
Image: Tata Motors
The acquisition offers Tata Motors a chance to significantly expand its global footprint. Currently, 90% of Tata Motors’ commercial vehicle revenue comes from India, but acquiring Iveco Group provides access to established markets in Europe and Latin America. This move reduces Tata’s reliance on the Indian market and opens new growth opportunities. Additionally, Tata’s expertise in light and medium commercial vehicles complements Iveco’s strength in heavy trucks and buses, creating a well-rounded product portfolio. The combined entity is expected to generate €22 billion in revenue, potentially tripling Tata Motors’ commercial vehicle revenue. By leveraging Iveco’s European engineering expertise and Tata’s manufacturing capabilities, the group is poised to compete with industry giants like Volvo, Daimler, and Traton.
Iveco Group stands to gain considerable advantages from this partnership. With 74% of its 2023 revenue generated in Europe, Iveco can now tap into India’s rapidly growing market and other emerging economies in Asia and Africa through Tata Motors’ extensive networks. Tata’s robust manufacturing and supply chain capabilities are likely to enhance Iveco’s operational efficiency and reduce costs. The collaboration also enables Iveco to offer a broader range of vehicles, meeting diverse global customer needs. Furthermore, the combined financial strength of the two companies will support significant investments in sustainable transport and advanced technologies, positioning Iveco for future growth while maintaining its corporate identity and Turin headquarters.
To facilitate the acquisition, Iveco Group had to address regulatory and political concerns surrounding its defence business, Iveco Defence Vehicles (IDV). The company agreed to sell IDV to Leonardo for €1.7 billion, with the transaction expected to close in Q1 2026, subject to regulatory approvals. This sale was crucial to alleviate national security concerns that had previously blocked a potential acquisition by China’s FAW. The proceeds from the sale will be distributed to Iveco shareholders as an extraordinary dividend, and Iveco will be delisted from the Milan stock exchange post-acquisition.
The combined Tata Motors-Iveco Group is expected to achieve annual sales of over 540,000 vehicles and generate €22 billion in revenue, with a balanced market presence across Europe (50%), India (35%), and the Americas (15%). This diversification strengthens the group’s resilience and positions it as a leading player in the global commercial vehicle market. The deal, set to close by mid-2026, is likely to enhance Tata Motors’ earnings and drive innovation in sustainable transport, though it will face regulatory scrutiny due to its scale.
Image: Iveco Group
Natarajan Chandrasekaran, Chairman of Tata Motors: “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. 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.”
Suzanne Heywood, Chair of Iveco Group: “We are proud to announce this strategically significant combination, which brings together two businesses with a shared vision for sustainable mobility. Moreover, the reinforced prospects of the new combination are strongly positive in terms of the security of employment and industrial footprint of Iveco Group as a whole.”
Girish Wagh, Executive Director of Tata Motors: “This combination is a strategic leap forward in our ambition to build a future-ready commercial vehicle ecosystem. By integrating the strengths of both organisations we are unlocking new avenues for operational excellence, product innovation and customer-centric solutions. This partnership not only enhances our ability to serve diverse mobility needs across markets, but also reinforces our commitment to delivering sustainable transport solutions that are aligned with global megatrends. Together, we are shaping a resilient and agile enterprise, equipped to lead in times of transformative change.”
Olof Persson, CEO of Iveco Group: “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. This combination will allow us to better serve our customers with a broader, more advanced product portfolio and deliver long-term value to all stakeholders.”
