Tata Motors has struck a deal to acquire Iveco Group for €3.8bn (£3.3bn), creating a “global champion” in commercial vehicles.

The combined group will have a major global presence, annual revenues of £19bn and sales of 540,000+ units a year

The agreement, which excludes Iveco’s defence business, follows weeks of speculation about the Italian truck manufacturer’s future and will build a commercial vehicle group with a significant global presence and sales of more than 540,000 units per year.

The transaction is expected to complete in the first half of 2026, creating a combined business with annual revenues of €22bn (£19bn) split across Europe (some 50%), India (around 35%) and the Americas (c.15%) with strong positions in emerging markets in Asia and Africa.

Tata’s offer, which will be made by a Dutch entity, is aimed at acquiring 100% of Iveco’s common shares with a subsequent delisting of Iveco Group from Euronext Milan and the company positioned as a wholly owned subsidiary of Tata. Iveco Group’s headquarters will remain in Turin, Italy, and the deal pledges to preserve each group’s industrial footprint and employee base.

The offer, which is based on a share price of €14.10 (£12.20), has received full and unanimous support and recommendation by the Iveco Board. It’s subject to several conditions, including a minimum acceptance level of at least 95% of Iveco’s common shares, which will be reduced to 80% if Iveco adopts the Post-Offer Demerger and Liquidation resolutions at the EGM. The deal is also contingent on the completion of the sale of Iveco’s defence business companies by 31 March 2026, or a spin-off by 1 April 2026, plus regulatory approvals.

The firms said the transaction would bring together complementary capabilities, global reach and a shared strategic vision to drive long-term growth and unlock significant value, creating a stronger, more diversified business.

Natarajan Chandrasekaran, chairman of Tata Motors, commented: “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.”

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.”