Iveco Group NV is nearing a deal to sell its defence unit to Leonardo SpA and the commercial trucking business to India’s Tata Motors Ltd., according to people familiar with the matter.Iveco could announce both transactions as early as Wednesday (July 30), when it’s scheduled to report earnings, said the people, who asked not to be identified because the talks are private. While negotiations are advanced, they could still be delayed or fall apart, the people cautioned.
A sale of the defence unit to Leonardo SpA would satisfy the demands of the Italian government to keep the business in local hands. That would help pave the way for a deal with Tata for the rest of the business, which includes commercial trucks, powertrains, buses and other specialty vehicles.
A sale of Iveco would extend an effort by Fiat’s founding family to diversify its interests from the automotive sector toward areas like healthcare, luxury goods and technology.Shares of Iveco, which is controlled by the Agnelli family’s investment vehicle Exor NV, have almost doubled this year, valuing the company at about €5 billion.

A strategic acquisition would significantly strengthen Tata Motors’ European operations and commercial vehicle production. The move would also enable the company to elevate its commercial vehicle design and technology and appeal more to European buyers.Leonardo, which is bidding with joint venture partner Rheinmetall AG for the defence unit and builds specialized vehicles for defence and civil protection including under the IDV brand, has been under pressure by the Italian government to reach a compromise on price.

Leonardo bid about €1.6 billion ($1.9 billion) including debt, Bloomberg News previously reported. While that trailed rival proposals from Franco-German tank maker KNDS NV and Czechoslovak Group, the bid was high enough to improve the chances of a deal with the Italian-German partners, the people said.

In parallel, Iveco has been holding talks for several months with Tata, the owner of Jaguar Land Rover.

Representatives for Iveco, Exor and Leonardo declined to comment, while Tata didn’t immediately respond to a request for comment.

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Iveco said to near defence, commercial deals with Leonardo, Tata

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