Indian commercial vehicle (CV) major Tata Motors’ takeover bid for Italian truck maker Iveco has cleared the key acceptance threshold of 80 per cent, thereby clearing the decks for the latter’s acquisition.
Tata Motors on Monday secured provisional acceptances for 87.81 per cent of Iveco Group’s share capital under its €3.91 billion takeover offer. This will take Tata’s shareholding in Iveco to 89.42 per cent. The move paves the way for further expansion of Tata Motors into the global markets and the launch of new product segments.
The acquisition was first announced in July last year and had faced several roadblocks in the last 15 months. In an extraordinary general meeting (EGM) on October 16, around 53 per cent reportedly voted in favour of the deal, 12 per cent were against it and 35 per cent did not vote. In the meeting, shareholders approved all resolutions proposed by the board, including lowering the minimum tender acceptance threshold from 95 per cent to 80 per cent.
“As part of the public tender offer (OPA) launched by Tata Motors for Iveco ordinary shares, 97,078,765 applications were submitted today, October 26, the last day for acceptances. Therefore, overall acceptance requests reach 238,157,212, equal to approximately 87.81 per cent of the total instruments being offered,” Iveco said in a stock market filing.
The final results will be communicated before market opening on October 29. Iveco said that the offer is set to be reopened during November 2-6. The tender offer, which had started on September 7, ended on Monday. The offer was made by TML CV Holdings, an indirect wholly owned subsidiary of Tata Motors.
The price for each common share tendered in acceptance of the offer consists of the initial price indicated in the offer document, equal to €14.1 (cum dividend), increased by the additional price of €0.3 (cum dividend), and is, therefore, equal to an aggregate amount of €14.4 (cum dividend) per common share, a statement said.
The deal, which was initially expected to be completed by June this year, was postponed due to a delay in regulatory approvals. For Tata Motors, whose CV division currently derives nearly 90 per cent of its revenue from India, the acquisition represents a strategic leap into new geographies. The two companies will have a combined annual sales volume of more than 540,000 vehicles and revenue of over $25 billion.
Iveco has an established presence across Europe, Latin America and Asia-Pacific, with production facilities in Europe, China, Russia, Australia and Latin America, and a network spanning 160 countries. Iveco’s annual revenue of around €10 billion is expected to boost Tata Motors’ CV scale, with its portfolio of electric buses, electric light commercial vehicle and alternative-fuel technologies. This may also nearly triple Tata Motors’ CV revenues from the current ₹77,000 crore to over ₹2 trillion, according to experts.