ROME (Reuters) -Shares in Iveco dropped as much as 6% on the Milan bourse in early market trade after the Italian truck maker sold its defence business to Leonardo and the rest of the company to India’s Tata Motors.
The deal with Tata values the commercial vehicle business at 3.8 billion euros ($4.35 billion), while the sale to the state-controlled company Leonardo gives the Iveco Defence Vehicles (IDV) an enterprise value of 1.7 billion euros.
In line with the agreement, Tata launched an all-cash tender offer for Iveco’s shares on Wednesday evening at 14.1 euros per share.
“We note that the proposed offer leaves a 3-6% upside relative to yesterday’s closing share price,” a Deutsche Bank report said on Thursday.
Later in the day, Italy’s industry minister is scheduled to meet with trade unions and Iveco to discuss the deals.
Italian metalworker union FIOM on Wednesday called on the government to intervene, adding that what it was “unacceptable” that the sale had gone through without consultations with unions.
The smaller UILM union has expressed concerns about potential layoffs and plant closures.
Officials from Prime Minister Giorgia Meloni’s office welcomed the deal as ‘quality foreign investment’ but said the Rome government would be monitoring the situation closely to ensure the protection of jobs, strategic resources, and the wider production chain.
($1 = 0.8731 euros)
(Reporting by Giulia Segreti, editing by Giselda Vagnoni)
