Italian-American industrial giant CNH Industrial is reportedly engaged in moves to sell its truck brand Iveco, with China’s FAW looking the most likely candidate at the moment.
A CNH Industrial spokesman confirmed to news wire service, Reuters recently, that the group is in ‘preliminary discussions over its Iveco business with FAW Jiefang’, but declined to disclose further details.
“No final agreement around the scope or nature of cooperation has been reached at this time and further information in line with statutory and regulatory requirements will be disclosed in due course,” the spokesman said.
Reuters had earlier reported that sources, which it claimed had knowledge of the matter, had said that talks had recently been revived after being put on hold last year.
FAW, a state-owned Chinese company, had made a preliminary offer that valued Iveco at a little more than 3 billion euros ($US 3.7 billion) which CNH had rejected, because it considered the valuation low according to Reuters in September.
The potential sale of Iveco appears to be a variation on CNH’s plan implemented in 2019 which split the industrial equipment and automotive group into two separate organisations. The second phase of the plan was to list the truck and bus business along with its FPT engine division in an effort to boost asset values and streamline its businesses.
The planned listing of the group, which is controlled by Exor, the holding company of Italy’s Agnelli family, was reportedly scheduled for early 2021 but this was delayed by the Covid 19 crisis.
The latest talks on Iveco’s future come as FAW, which makes heavy duty trucks under its Jiefang brand, looks to expand outside China in the near term.
FAW has reportedly now made an improved takeover offer in the latest discussions and it is believed it wants to acquire all of Iveco’s commercial vehicles business, including trucks and buses, as well as a minority stake in the FPT engine division.
An investment in Iveco will help FAW’s Jiefang brand to gain access to the international commercial vehicles market.
Iveco, the smallest of Europe’s established truckmakers, competes with the likes of Daimler, Volvo Group, Paccar and Volkswagen’s Traton in the fiercely competitive Euro market.
CNH has also reportedly held talks with Chinese industrial conglomerate Shandong Heavy Industry Group late last year.
Sources revealed that Shandong Heavy Industry offered at least 3.5 billion euros but was outbid by FAW.
Separately, Iveco is in talks to jointly develop autonomous truck technologies with Chinese startup Plus, which has close ties with Jiefang.
FAW has in the past had close associations with both Volkswagen and Toyota involving production of passenger cars in China.