Iveco Group to sell defence business to Leonardo for €1.7 billion

TURIN - Iveco Group N.V. (EXM:IVG), a prominent player in the Machinery industry according to InvestingPro, announced Wednesday it has signed a definitive agreement to sell its Defence Business, which includes the IDV and ASTRA brands, to Italian defence company Leonardo S.p.A. (BIT:LDO) for an enterprise value of €1.7 billion. The company, which maintains a healthy current ratio of 6.42, has shown strong financial momentum over the past three months.

The transaction aims to create an Italy-based European champion in the land defence segment with enhanced global competitive capabilities, according to a company press release.

The sale follows Iveco Group’s February 7 announcement that it would separate its Defence Business from its commercial vehicles operations to provide both divisions with greater strategic flexibility.

Upon completion, expected no later than March 31, 2026, Iveco Group plans to distribute the net proceeds to shareholders via an extraordinary dividend, subject to closing adjustments. The deal remains subject to customary regulatory approvals and carve-out completion.

"This agreement propels Iveco Group’s Defence Business into its proper dimension as a key contributor alongside Leonardo in the creation of a focused, world-class player in land defence activities," said Olof Persson, CEO of Iveco Group.

The Defence Business, which generated revenues of €1.1 billion in 2024, specializes in military mobility solutions including armored, amphibious, trucks and multirole vehicles. The operation encompasses six production sites and nine commercial offices globally. This significant transaction comes as Iveco Group demonstrates strong market performance, with InvestingPro data showing notable price momentum over the past six months. Subscribers can access additional ProTips and detailed financial metrics to better understand the company’s valuation and growth prospects.

Goldman Sachs Bank Europe SE, Succursale Italia acted as financial advisor to Iveco Group for the transaction, with Freshfields serving as legal advisor.

Iveco Group employs approximately 36,000 people worldwide and operates 19 industrial sites and 30 R&D centers across its seven brands, which include IVECO, FPT Industrial, IVECO BUS, HEULIEZ, IDV, ASTRA, and IVECO CAPITAL.

In other recent news, Iveco Group reported its Q1 2025 earnings, revealing a 10% year-over-year decline in consolidated net revenues, amounting to €3 billion. This figure fell short of the forecasted €3.7 billion, although earnings per share met expectations at €0.31. Meanwhile, the Italian government is closely monitoring a potential sale of Iveco Group to Tata Motors. Industry Minister Adolfo Urso noted the possibility of utilizing "golden power" legislation to impose conditions on such deals, given the strategic importance of the company. Additionally, Italian Defense Minister Guido Crosetto expressed a preference for keeping Iveco’s defense unit under Italian ownership, citing its significance to the national industrial sector. These developments highlight ongoing discussions around the company’s future ownership and strategic direction.

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