Tata Motors shares fall 4% amid reports of $4.5 billion deal to buy Italian truck maker Iveco

Shares of Tata Motors Ltd dropped as much as 4% in opening trade after media reports said that India’s biggest commercial vehicle maker is set to buy Italian truck maker Iveco for $4.5 billion, possibly the biggest deal for Tata Motors after its 2008 acquisition of Jaguar Land Rover (JLR) for $2.3 billion.

While Tata Motors has yet to announce anything on the purported deal officially, Iveco said in a statement that it is engaged in “ongoing, advanced discussions with different parties” for potential transactions involving its defence business, on the one hand, and the balance of the company on the other.

“In accordance with its fiduciary duties, the Board of Directors of the Company (the “Board”) is in the process of carefully reviewing and evaluating all aspects of these potential transactions. In doing so, the Board is giving careful consideration to the interests of Iveco Group and all its stakeholders, including its shareholders, employees and clients. The Board will keep the market updated in accordance with applicable laws,” the Italian truck manufacturer said.

Reacting to the news, shares of Tata Motors tumbled 3.9% to hit a low of ₹665.45 on the BSE, taking the automaker’s market capitalisation to ₹2.46 lakh crore.

Tata Motors plans to acquire 27.1% from Exor, the investment company of the Agnelli family, and launch a tender offer to buy out the other smaller shareholder groups, reported The Economic Times. Exor controls 43.1% of the voting rights of the truck maker, the report said.

Tata Motors has partnered with Italy’s Agnelli family in the past. In 2006, Tata Motors and Agnelli family’s flagship Fiat Motors had formed a joint venture in India to produce cars, engines and transmissions at Ranjangaon in Maharashtra.

Tata Motors is demerging its passenger vehicle and commercial vehicle businesses into two separate entities.

Tata Sons chairman N Chandrasekaran in May this year said that the proposed demerger of Tata Motors will bring greater strategic clarity and agility, enabling a more focused approach to execution and value creation, delivering long-term returns for shareholders.

“The proposed demerger will bring greater strategic clarity and agility, enabling a more focused approach to execution and value creation, delivering superior experiences for customers, rewarding careers for employees, and long-term returns for shareholders,” Chandrasekaran, who is also the chairman of Tata Motors, said in the company’s integrated annual report ahead of its annual general meeting in June.

Tata Motors’ commercial vehicles business recorded domestic sales of 79,572 units in Q1 FY26, a 9.2% decline compared to Q1 FY25. Domestic sales of Medium and Heavy (M&H) and Intermediate Commercial Vehicles (MH&ICV) in June 2025, was 12,871 units versus 14,640 units in June 2024. In Q1 FY26, it was 37,370 units, compared to 40,349 units in Q1 FY25.

“Q1 FY26 began on a subdued note for the commercial vehicle industry with muted performance in the HCV and SCVPU segments while Buses, Vans, and ILMCVs registered modest year-on-year growth,” said Girish Wagh, Executive Director, Tata Motors.

“However, June 2025 witnessed a sequential growth of 8% over May 2025. Additionally, our International Business delivered a robust 67.9% growth in volumes over Q1 FY25,” said Wagh. “During the quarter, we launched India’s most affordable mini-truck, the Ace Pro, offered in petrol, bi-fuel, and electric powertrains, which received an encouraging market response. We enhanced driver comfort by introducing air-conditioned cabins across our entire range of light to heavy trucks. We also expanded our international footprint by entering Egypt and expanded our offerings for the Middle East & North African region,” he added.