Tata Motors nears $4.5 bn deal for Iveco’s commercial vehicle business

Tata Motors Ltd is set to acquire the commercial vehicles business of Italian manufacturer Iveco in a deal valued at $4.5 billion, The Economic Times reported.

The transaction, which has been in the works for several months, was expected to be placed before the Tata Motors board for approval on Wednesday.

A formal announcement is likely to follow the board meeting, people familiar with the matter told the newspaper.

Tata Sons chairman N. Chandrasekaran and senior Tata Group executives are leading the discussions, which have progressed significantly.

The deal will exclude Iveco’s defense operations, which are to be demerged ahead of the transaction, and the acquisition is being structured as a carve-out, the report said.

Iveco’s industrial business is currently valued at €15 billion, with earnings before interest and tax of €575 million and free cash flows of €402 million.

Europe accounts for nearly 74% of the unit’s sales.

If completed, the deal would mark one of the largest cross-border acquisitions by the Tata Group in recent years, adding to a roster that includes Tata Steel’s $12 billion Corus deal in 2006 and the $2.3 billion purchase of Jaguar Land Rover by Tata Motors in 2008.