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News Topical, Digital Desk : The Italian government has given conditional approval to the sale of truck maker Iveco to India's Tata Motors, a parliamentary document said on Friday, Reuters reported. The Italian government has given conditional approval to the acquisition of truck maker Iveco by India's Tata Motors, a report said. The decision was taken on October 31, according to a document presented to parliament on Friday. Tata Motors has agreed to buy Iveco for 3.8 billion euros (about $4.36 billion).
Prior to this deal, Iveco had reached an agreement to sell its defense business to Leonardo, the Italian state-owned defense company. Iveco, which manufactures trucks, buses, and engines, is controlled by the Italian Agnelli family, whose investment company, Exor, currently holds a 27.1 percent stake and 43.1 percent voting rights in Iveco. Exor will transfer this stake to Tata Motors.
What will be the benefits? Tata and Iveco said in a joint statement that this deal will bring together the complementary product portfolios and capabilities of the two companies, which do not have any significant overlap at the industrial or geographical level. The acquisition will create a significant global presence for the combined group. Annual sales are expected to exceed 5.4 lakh units and revenues are expected to reach approximately 22 billion euros. Iveco, which generated 74 percent of its revenue from Europe last year, is considered a strategically suitable acquisition for Tata Motors. While Tata Motors has a strong presence in the passenger car segment through Jaguar Land Rover, its presence in the European commercial vehicle market is almost non-existent.
About Iveco Iveco is the smallest of Europe's major truck manufacturers – a market led by companies like Volvo, Daimler and Traton. Such a takeover was previously considered difficult due to Iveco's active involvement in the defense sector. Iveco shares have risen nearly 25% since mid-July, when news first emerged that Tata Motors was in talks to acquire the company.
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