Tata Motors shares fall amid all-cash offer for Iveco group; key details

Shares of Tata Motors Ltd rise in Monday's after an all-cash voluntary tender offer to acquire all common shares of Iveco Group for 14.10 euros per share in a voluntary tender offer, valuing the Italian commercial vehicle maker at 3.82 billion euros.

In a filing to stock exchanges said the offer is made by TML CV Holdings B.V. for all issued common shares of Iveco group. The acceptance period will run until October 26. The offer is subject to certain customary conditions, including a minimum acceptance level of 95 per cent of the common shares, to be automatically reduced to 80 per cent if the shareholders adopt the back-end resolution at the EGM.

Tata Motors shares were down 0.47 per cent at Rs 458.20. The stock later erased losses and was trading 0.17 per cent higher at Rs 459 by 9.29 am. The 12-month Bloomberg consensus target on the stock, based on 23 analyst recommendations, stood at Rs 528.27, implying 15.3 per cent potential upside.

Tata Motors said the offer brings together two businesses with highly complementary product portfolios and capabilities and with substantially no overlap in their industrial and geographic footprints, creating a stronger, more diversified entity with a significant global presence and sales of over 5,90,000 units per year.

"Together, Iveco and the commercial vehicle business of Tata Motors have combined revenues of EUR 21 billion (Rs 2,28,000 crore) split across Europe (46 per cent), India (32 per cent), South America (8 per cent) and Rest of the World (14 per cent) with attractive positions in emerging markets in Asia and Africa," 
 
Tata Motors 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 said.

"By preserving each group’s industrial footprint and employee communities, this complementarity is also expected to foster a smooth and successful integration process. Furthermore, in the context of the ongoing, rapid transformation of the global commercial vehicle industry, the strategic combination of the commercial vehicle business of Tata Motors and Iveco Group will transform both entities, creating a robust platform with a global customer base and geographically diverse footprint," Tata Motors said.

The Tata group firm said 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," Tata Motors said.