Iveco continues rally, rumours of divestment intensify

(Il Sole 24 Ore Radiocor)- Iveco Group is moving at a fast pace, extending the positive streak that began last Friday when rumours began circulating about ongoing negotiations for a possible sale of the company by Exor, the holding company of the Agnelli-Elkann family that controls 27.06% of Iveco. The stock is on a high for the day, and brings more than 11% up since the close last Thursday, before the rumours. The stock, which had also risen above €18 in May (intraday high of €18.1), has gained over 80% since the start of the year, first buoyed by interest in the defence business and now by rumours that the Agnelli family is in negotiations for a possible sale, with Tata Motors listed as one of the potential buyers for the company that produces trucks and commercial vehicles (Exor has reportedly begun discussions with more than one counterparty, in any case non-European). The Indian group would have come forward with Exor, the holding company of the Agnelli-Elkann family, to take over the controlling stake in Iveco Group, but the sale would not include Idv, or rather the defence sector activities, for which the project to spin off or sell off is proceeding (with interest from Leonardo and the German Rheinmetall). Defence indiscretions speak of a valuation around EUR 1.7 billion. According to press rumours, an agreement in principle for Iveco would already be ready and the government would be informed, but, in fact, Idv must first be separated, with the company having made it known with the first quarter accounts that it wanted to close the dossier (with a spin-off or sale) by the end of the year. "This would be confirmation of our idea that Iveco ex-Idv is destined for a business combination or to be acquired in order to accelerate the resolution of known structural problems. We are surprised by the timing of these rumours as they predate the decision on Idv's future,' point out analysts atEquita, according to whom 'given Tata's limited presence in commercial vehicles in Europe we believe the rumour can be considered realistic'. Although the official position of Exor and Iveco is a dry 'no comment', the sale of the company could make sense. In fact, according to some market analysts, a 'lighter' Iveco, i.e. without the defence activities, could be interesting and more 'approachable' for the Indian group. Such an operation, if it goes through, could representan expansion opportunity for Iveco. It is then to be understood what position the government would take: 'We are very attentive to the Iveco sale process and to safeguarding our technology, our industry and employment levels,' said the Minister for Enterprise and Made in Italy, Adolfo Urso, yesterday, recalling that he had decided to convene the trade unions, as they had requested, in the coming days for a discussion on the two Iveco sale processes. Meanwhile, the unions are already on the warpath, concerned about the future of the 14,000 Iveco group workers in Italy. "The spin-off of Iveco Defence would therefore be confirmed as a preordained plan to sell off an important part of the industrial heritage of our Republic. The government must stop any sale hypothesis that calls into question Iveco's plants and workers," said Fiom-Cgil.