Tata Motors-Iveco Deal: Here’s How the Automaker Plans to Fund €3.8 Bn Acquisition Deal

Tata Motors is mulling to raise ₹10,000 crore in equity in the coming 12-18 months to partly fund the Iveco acquisition deal. The fundraise is part of a broader €3.8 billion funding secured via the Bridge Financing Facility from Morgan Stanley and MUFG, the Economic Times reported. Tata Motors is eyeing to close the planned acquisition of the Italian commercial vehicle (CV) maker by April 2026. The deal is yet to receive regulatory approval across Europe and other jurisdictions. 

The auto arm of the Tata Group is reportedly likely to monetise its 4.7% stake in Tata Capital to raise part of the equity. 

“We expect to raise roughly a billion euros through a mix of rights issue, equity, and monetisation of our Tata Capital stake. The remainder will be serviced through debt, which we plan to repay over four years from strong free cash flows,” Group CFO, Tata Motors, PB Balaji told ET.

Tata Motors-Iveco Deal: Tata Group’s Big Bet on Global Biz 

Tata Motors deal with the Agnelli family to acquire the Italian truck maker is a significant move, particularly because it comes at a time when the company’s international business is outperforming its domestic business in both the passenger and commercial vehicle categories. Its PV sales from international business increased by 54%, and CV sales rose by 70% in the first quarter of the financial year 2026. 

The deal, which is set to strengthen Tata Motors position in the European large vehicle market, is unlikely to impact jobs. The company reportedly has signed non-financial covenants to protect manufacturing jobs in Italy and Europe. The acquisition will give Tata Motors access to global technology, design and global talent.  

“This is a transformative deal. This is not a cost-cutting deal. There are non-financial covenants to protect manufacturing jobs and facilities in Italy and Europe,” executive director, Tata Motors CV business Girish Wagh told ET. “Our focus is on growth-led synergies-introducing Iveco’s buses and trucks to India, and leveraging Tata’s small CV range across Latin America. We also plan to unify and streamline R&D around next-gen powertrains, electrification and ADAS technologies,” Wagh added. 

Following the acquisition of Iveco, Tata Motors will become the fourth-largest truck manufacturer globally in terms of volumes, according to a report by Motilal Oswal. The combined entity can further strengthen its position via integrated and planned investments in R&D spending, particularly in evolving technologies. 

“Key synergies of the acquisition include transformation of the combined entity as the fourth-largest truck OEM globally in terms of volume, leveraging each other’s strengths through complementary products and regions, and potentially optimizing the combined R&D spending by integrating planned investments in evolving technologies,” the report stated.