Tata Motors to drive home Iveco takeover in Rs 38,000 crore landmark global deal
This is the biggest acquisition by Tata Motors after it acquired Jaguar Land Rover (JLR) from Ford in 2008 for $2.3 billion in an all-cash transaction.
The envisaged voluntary tender offer will be made by TML CV Holdings Pte Ltd or a new limited liability company to be incorporated under Dutch law, which will be wholly owned, directly or indirectly, by Tata Motors. Iveco is based in Turin, Italy, and it forms part of Iveco Group N.V., which is incorporated in Amsterdam
Tata Motors fell by 3.47 per cent to Rs 668.40 on the BSE on Wednesday.
Iveco and Tata Motors on Wednesday announced that they have reached an agreement to create a commercial vehicles group with the reach, product portfolio and industrial capability to be a global champion in this dynamic sector.
The completion of the offer is conditional on the separation of Iveco's defence business and, as such, the public offer is for all issued common shares of Iveco Group after the separation of that business, at a price of euro 14.1 (cum dividend, excluding any dividend distributed in relation to the sale of the defence business) per share in cash, TML said. The offer represents a total consideration of approximately euro 3.8 billion for Iveco Group, excluding Iveco's defence business and the net proceeds from the defence business separation.
Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of euro 22 billion (Rs 2,20,000 crore) split across Europe (50 per cent), India (35 per cent) and the Americas (15 per cent) with attractive positions in emerging markets in Asia and Africa.
Tata Motors Chairman Natarajan Chandrasekaran 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,' he 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,' Suzanne Heywood, Chair of Iveco Group.
Exor, Iveco's largest shareholder with approximately 27.06 per cent of Iveco's common shares and 43.11 per cent of all voting rights, has executed an irrevocable undertaking to support the offer and tender its shareholding and vote in favour of the resolutions that will be proposed at the EGM to be held in connection with the offer.
Iveco was established following the demerger from CNH Industrial, which separated the Commercial and Specialty Vehicles, Powertrain, and related Financial Services businesses.
'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,' TML said.
Iveco is a commercial vehicles brand that designs, manufactures, and markets heavy, medium, and light-duty trucks. Iveco Group employs 36,000 people around the world and has 19 industrial sites and 31 R&D centres.
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