Tata Motors to raise €1 billion in equity to fund Iveco buyout
Mumbai: Tata Motors on Thursday announced it will raise around €1 billion (approximately $1.14 billion or ₹10,000 crore) in equity to help repay the loan backing its €3.8 billion (₹38,000 crore) acquisition of multinational transport vehicle manufacturing company Iveco’s trucks and bus business, media reports said.
On 30 July 2025, Tata Motors announced the acquisition of Iveco’s commercial vehicle business.
The company also indicated plans to potentially introduce Iveco vehicles in India and expand Tata-branded products into markets where Iveco has a strong presence, Indian Express reported.
The deal, Tata Motors’ largest since its $2.3 billion Jaguar Land Rover acquisition in 2008, will exclude Iveco’s defence operations.
It will initially be financed through a €3.8 billion bridge loan secured from Morgan Stanley and MUFG.
According to the report, PB Balaji, Tata Motors CFO, said during a conference call, “We plan to refinance the bridge loan with a mix of long-term debt and equity within 12 to 18 months after the deal closes.”
“We are targeting to repay the entire acquisition debt over a four-year period,” he added.
The company is considering a rights issue or qualified institutional placement (QIP) for the proposed equity raise.
Tata Motors also aims to monetise its stake in Tata Capital as part of its repayment strategy.
Tata Motors expects the acquisition to be earnings accretive from the second year, driven by cost synergies and a relatively low acquisition multiple.
According to Executive Director Girish Wagh, the two companies’ product portfolios complement each other in both pricing and capability.
“Iveco brings strong technology in areas like powertrain electrification, hydrogen and ADAS. Combined with our frugal engineering and design-to-value strengths, we see strong competitive advantages emerging,” Wagh said.
He added that synergies could include launching Iveco products in India and Tata vehicles in regions like Latin America where Iveco is already established.
However, he clarified that the Iveco brand, operations, and distribution channels will continue to function independently post-acquisition.
Tata Motors had been in discussions with Iveco for the past six months.
Once finalised, the deal will give Tata Motors access to new product platforms, manufacturing facilities, and a mature sales and service network — particularly in Europe and Latin America, Wagh said.
“We’ll also gain access to strong retail financing capabilities in several of these markets,” he added.
Iveco has more than 32,000 employees worldwide as of December 2024, excluding its defence and discontinued divisions.
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