European leader in commercial vehicles and mobility Iveco Group and global automotive firm Tata Motors have announce an agreement to create a commercial vehicles group.
The firms the group would have “the reach, product portfolio and industrial capability to be a global champion in this dynamic sector”.
The offer would bring together two businesses with highly complementary product portfolios and capabilities and with “substantially no overlap” in their industrial and geographic footprints, creating a “stronger, more diversified entity with a significant global presence”, the announcement said.
Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of around €22bn across Europe (c.50%), India (c.35%) and the Americas (c.15%) with attractive positions in emerging markets in Asia and Africa.
The combined group will be better positioned to invest in and deliver innovative, sustainable mobility solutions by leveraging both supplier networks to serve customers globally. It will also unlock superior growth opportunities and create significant value for all stakeholders in a dynamic marketplace. By preserving each group’s industrial footprint and employee communities, this complementarity is also expected to foster a smooth and successful integration process.
In addition, the companies said that in the “context of the ongoing, rapid transformation of the global commercial vehicle industry”, the strategic combination of the commercial vehicle business of Tata Motors and Iveco Group will “transform both entities, creating a robust platform with a global customer base and geographically diverse footprint”.
The new company will be able to drive better operating leverage by spreading its capital investments over larger volumes, generating important efficiencies and reducing the cash flow volatility inherent in the commercial vehicles sector. It will also enable the capabilities of Iveco Group’s successful powertrain business, FPT, to be further enhanced, the companies said.
Natarajan Chandrasekaran, Chairman of Tata Motors, said:
“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, said:
“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, said:
“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, said:
“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.”
