As per the company statement, the offer pegs the value of Iveco at about 3.82 billion euros.
Tata Motors CV has signed a debt commitment letter with Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd. for fully committed bridge financing.
Iveco’s board has unanimously supported and recommended the offer.
Italy’s Agnelli family-owned Exor, Iveco’s largest shareholder, has also irrevocably committed to back the transaction. Exor has tendered its 27 per cent stake in Iveco’s common shares & 43.19 per centof its voting rights
The tender offer opens on Monday 7 September, while Iveco shareholders will vote on the matter in October. The open offer is intended to achieve the acquisition of 100% of the Common Shares and the Delisting of Iveco Group from Euronext Milan.
Together, Iveco and the commercial vehicle business of Tata Motors have combined revenues of c 21 billion euros across Europe, India and South America and Rest of the World with attractive positions in emerging markets in Asia and Africa, the company said.
The combined group will be better positioned to invest in and deliver innovative, sustainable mobility solutions by leveraging both supplier networks to serve customers globally. It will also unlock superior growth opportunities and create significant value for all stakeholders in a dynamic marketplace, it added.
The new company will be able to drive better operating leverage by spreading its capital investments over larger volumes, generating operating efficiencies and reducing the cash flow volatility inherent in the commercial vehicles sector. It will also enable the capabilities of Iveco Group’s successful powertrain business, FPT, to be further enhanced, the company said.
“By combining our respective strengths, capabilities and market presence, we have the opportunity to build a stronger, more globally competitive commercial vehicle business that is better positioned to serve customers, invest in future technologies and create sustainable value for all stakeholders,” Girish Wagh, Managing Director and CEO, Tata Motors, said.
We have immense respect for Iveco Group’s heritage, talented people and trusted brands, and we look forward to supporting their continued growth and success. We believe the tender offer presents a compelling value proposition for Iveco Group shareholders and look forward to its successful completion, he said.
“The many benefits of this transformational combination are clear. By creating a major new force in global commercial vehicles, we will unlock the significant advantages of increased scale and reach, accelerate innovation and bring even more industry-leading products to customers worldwide. The complementary nature of our two businesses further enhances the rationale of the transaction, supporting long-term opportunities for our employees, strengthening prospects for our suppliers and partners, and reinforcing the foundations for continued growth. Given these strategic benefits, together with the attractive value offered to shareholders, our Board unanimously supports and recommends the tender offer,” Olof Persson, CEO of Iveco Group, said.
