Tata Motors in advanced stage of talks to acquire Italian truck maker Iveco, reports
The takeover of Iveco would be the latest in a series of high profile global takeovers by the Tatas such as Tetley, Corus Group, Jaguar Land Rover, Daewoo trucks. The deal ccould be the biggest the Indian conglomerate has struck so far.
Kolkata: Tata Motors, the largest group in the Tata conglomerate, is about to take over Italian truck maker Iveco, reports have said. The company is now under the control of the Agnelli family of Italy. The value of the deal could reach $4.5 billion, which would make it the second most expensive acquisition of the group after Corus Steel.
Reports also stated that a formal announcement of the acquisition could take place on July 30 after a meeting of the boards of the two companies. This week Iveco management said that they were negotiating with different companies for two distinct deals for the two businesses. Apaparentlty, the defence business will not be a part of the business that the Tatas will bne taking over.
The high profile takeovers by Tatas
This will be the latest in a series of high profile takeovers of the group in Europe -- Tetley in 2000 for $450 million, Corus Group in 2007 for $12 billion and Jaguar Land Rover in 2008 for $2.3 billion. Iveco has both a defence business and truck business. Morgan Stanley is the advisor to the Tatas for gthe deal which Agnellis and Iveco are taking help from Goldman Sachs.
A Dutch company could act as the vehicle to clinch the deal for Tata Motors. This Dutch company is fully owned by Tata Motors.
Media reports claimed that Tata Motors could pick up 27.1% from Exor, a company through which the Agnelli family owns Iveco. Then it will launch an open offer (called tender offer in Italy) to pick up all the stake of smaller shareholders of Iveco.
Iveco was set up on January 1, 1975 by merging the commercial vehicle divisions of Fiat, Lancia, and OM (all three Italian companies) with German truck maker Magirus-Deutz and French company Unic. It is known as the smallest of the big truck makers of Europe in a market that has prominent players such as Volvo, Daimler and Traton.
Iveco is active in the markets of Latin America, North America and Europe, which is its main market. Significantly, Tata Motors acuired Tata Daewoo, for Rs 246.3 crore in 2004.