August 22, 2025 | Industrials | Europe | Active
On 30-Jul-25, Agnelli family-backed truckmaker Iveco Group announced two separate transactions, whereby the company will (i) sell its defence unit, to Italian defence group Leonardo (LDO IM), and (ii) sell its commercial vehicle business, to India’s Tata Motors. Proceeds from the defence sale to Leonardo, planned to complete in 1Q’26, will result in Iveco paying out an extraordinary dividend between €5.50-6.00 per Iveco share, while the commercial vehicle sale to Tata Motors, planned to complete in 2Q’26, will exclude the defence unit and be undertaken through a voluntary tender offer at €14.10 cash per share. For all intents and purposes, therefore, risk arbitrage funds should consider that the offer consideration is €14.10 plus a special dividend (€5.50-6.00, albeit subject to withholding taxes for most investors). Defence Unit Sale to Leonardo (€1.7bn) Iveco has signed a definitive agreement to sell its defence business, comprising of the Iveco Defence Vehicles (IDV) and ASTRA brands, to Leonardo for €1.7bn. IDV designs and manufactures specialised defence and civil protection equipment, while ASTRA produces large-scale heavy-duty quarry and construction vehicles. The division is a key supplier of military mobility, protection capabilities, and autonomous platforms, offering armoured, amphibious, truck, and multirole vehicles, and the unit operates six production sites and nine commercial offices worldwide, generating €1.1bn in revenue in 2024. Previously, in February 2025, Iveco had announced plans to separate its defence operations from its commercial vehicle business so it could improve focus and strategic flexibility at both units. According to the Financial Times, several European bidders expressed interest, but the Italian government insisted on a domestic buyer for strategic reasons, making Leonardo the favoured choice (Leonardo is 30.2% held by Italy’s Ministry of Economy & Finance). For Leonardo, the acquisition will strengthen its position in land defence capabilities in Italy, across Europe, and globally. Completion of the sale is expected by 31-Mar-26 and is subject to regulatory approvals. Iveco will, upon completion, distribute the net proceeds to its shareholders via an extraordinary dividend of €5.50-6.00 per share, subject to certain adjustments. Tata Motors’ Voluntary Tender Offer for Commercial Vehicles (€3.8bn) Separately, Tata Motors will launch a recommended voluntary tender offer for Iveco’s commercial vehicle business at €14.10 per share, valuing the offer at €3.8bn. The offer price is cum-dividend and excludes the payout from Iveco’s defence unit sale. Adding the dividend, pre-withholding taxes, brings total consideration to €19.60-20.10 per share, a 27.9–31.2% premium to Iveco’s undisturbed share price of €15.325 on 17-Jul-25. Iveco’s board unanimously supports the tender offer and will recommend shareholders accept it and vote for related resolutions at an EGM to be held within six business days before the end of the acceptance period. While Iveco is headquartered in Turin, Italy, the company is ...
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