Mumbai, October 27: Tata Motors has moved a step closer to acquire Italian commercial vehicles giant Iveco, with 87.8% of its shareholders approving the transaction, the company said in a press release. Factoring in Iveco’s existing treasury stock, Tata Motors indirect holding reaches 89.24%, comfortably crossing the 80% acceptance threshold needed to buyout a company.
The voluntary tender offer, valued at about €3.43 billion (over ₹38,000 crore) has been priced at €14.40 per share. Now that Tata Motors has won the majority shareholder approval, it will now initiate a pre-agreed post-offer demerger and asset sale strategy to acquire 100% of Iveco Group and subsequently delist the company from the Euronext Milan platform.
The acquisition is the biggest cross border transaction made by the Tata Group since Tata Motors acquired Jaguar Land Rover (JLR) for $2.23 billion in 2008. With this acquisition, Tata Motors aims to combine its commercial vehicle arm and Iveco into an entity that delivers 540,000 commercial vehicles annually with revenues exceeding €22 billion ($25 billion).
Though all hurdles are now cleared for acquiring the stake in Iveco, the true test for Tata Motors will come in integrating the company and its workforce across the world, while synergizing the technological strengths of both companies to scale up its presence in Europe and South America, while offering Tata Motors access to heavy duty deep mining truck and tractor trailers, a segment that it doesn’t have a presence in currently. Beyond that, Tata Motors will have to spend on research and development in alternative fuel powertrains, hydrogen, and electric commercial vehicles as per the changing dynamics of the market.
