MILAN (Reuters) -Iveco coordinated closely with the Italian government on its deals to sell its truck business to Tata Motors and its defence unit to Leonardo, a source with knowledge of the matter said on Monday.
India’s Tata Motors last week agreed to buy Iveco in a deal valuing it at 3.8 billion euros, while the Italian truck and bus maker separately agreed to sell its IDV defence business to Leonardo, giving it an enterprise value of 1.7 billion euros.
The government’s preliminary review of the deals, before they were officially announced, may indicate Prime Minister Giorgia Meloni’s administration will not set heavy conditions on the deals.
Iveco declined to comment on Monday. The Italian government was not immediately available for comment.
Presenting the deals last week, Iveco CEO Olof Persson said Tata Motors had committed to maintaining Iveco’s “industrial footprint and employee communities”, as well as its corporate identity.
Iveco’s headquarters will remain in Turin, Italy, after the acquisition is completed, the two groups also said last week.
Iveco last year made 74% of its revenues in Europe and 11% in South America, whereas Tata currently has no European or South American truck or bus making operations.
That absence of overlap in those regions will enable the Indian manufacturer to scale up the Iveco business, the source said, including through investments needed to expand the smallest European truckmaker and to meet industry safety and environmental regulations.
The source said Tata Motors increased the total headcount in two previous large M&A deals it made, the 2004 acquisition of Daewoo Commercial Vehicle in South Korea and the 2008 purchase of Jaguar Land Rover in the United Kingdom.
The Italian government is expected to put the two sales under scrutiny as part of so-called golden power legislation, which allows it to intervene on deals involving companies deemed of national interest.
When the two deals were announced last Wednesday, officials from Meloni’s administration said the government supported “quality foreign investment” but would closely follow the deals to ensure the protection of jobs, strategic resources and the wider production chain.
Iveco employs around 36,000 people, including 14,000 in Italy.
Exor, the holding company of Italy’s Agnelli family, currently owns a 27.1% controlling stake in Iveco, with 43.1% of voting rights.
(Reporting by Giulio Piovaccari, editing by Cristina Carlevaro and Susan Fenton)
