Iveco, ceo Persson: Tata will keep brands and logos, guarantees on factories and jobs

(Il Sole 24 Ore Radiocor) - A double transaction that will unlock Iveco's growth potential, creating a global champion of European defence and strengthening the remaining part of the group, which otherwise - despite being solid and with good prospects - risked being crushed by much larger competitors. Describing the strategy that led to the sale of the defence business to Leonardo and the remainder to India's Tata Motors (the first transaction is worth €1.7 billion, the second €3.8 billion and is tied to the closing of the other) was Iveco Group CEO Olof Persson during the call with analysts to comment on the second-quarter and first-half results, published on Wednesday with the markets closed.

The CEO was keen to emphasise, in particular, that Tata has givenguarantees for the future of the group, as well as that of its workers and factories: "Tata will continue to drive decisions for long-term growth and maintain the competitiveness of the business. It is also committed to respecting and maintaining Iveco Group's corporate identity, integrity, core values and culture, as well as Iveco's main brands, trade-marks and logos," Persson said, pointing out that the Indian group has also committed to non-financial agreements that will remain in place for two years after the settlement and "does not foresee any reduction in Iveco Group's workforce as a direct result of the merger, there will be no factory closures andIveco's headquarters will remain in Turin.

By joining forces with Tata Motors, 'we are unlocking new potential to further enhance our industrial capabilities, accelerate innovation in zero-emission transport, and expand our presence in key global markets. This union will enable us to better serve our customers with a broader and more advanced product portfolio and deliver long-term value to all stakeholders," explained the CEO.
Combined with the transactions with Tata Motors and Leonardo, 'our strategy will unlock significant potential to expand our industrial capabilities, accelerate innovation in zero-emission transport, and expand our presence in key global markets. I believe this approach will enable us to generate increasing long-term value for all stakeholders and will be the springboard to an exciting future'. In particular, the deal with Tata 'will bring together complementary businesses with a broader portfolio and greater geographic presence, creating value for shareholders' and the sale of Defence to Leonardo 'is positive news for the defence division and for the entire group'.

The Iveco Group board believes that the announced transactions "are in the best interests of the company and its shareholders. I believe they are exciting and positive news, which improve the group's prospects and will benefit all stakeholders," Persson said. "The combined operating businesses of Iveco Group and Tata Motors, excluding defence, will create a specialised commercial vehicle group that will have the scope, product portfolio and industrial capacity to become a global champion in this dynamic sector," the ceo said, pointing out that "in parallel, Idv and Astra will become an integral part of a significantly larger company, better positioned to invest and compete in a segment of key strategic importance."
As part of the transaction with Tata, Exor, the principal shareholder of Iveco Group, has made an irrevocable commitment to support the offer and to tender its shareholding, which amounts to approximately 27.06% of the common shares and 43.11% of the total voting rights of Iveco Group. Iveco has pledged that the members of the Iveco Board of Directors who hold a total of approximately 1.39% of the company's common shares will accept the offer. The offer aims to acquire 100% of Iveco's common shares with the subsequent delisting of Iveco Group from Euronext Milan.

The dual operation, therefore, can open up interesting prospects for the group, from an industrial point of view and vis-à-vis competitors, and from a geographical presence point of view. "This is not the finishing line, but the starting point for an exciting future. We are making investments in innovation and products to prepare the group for a future of growth. We move forward with head and heart, we are proud of our Italian roots and our commitment to sustainability. These values are rooted in our vision for the next 50 years and in our products,' Persson continued.