Iveco takeover talks with FAW Jiefang break down

No clues given for ending negotiations with China’s FAW

Iveco takeover talks with FAW Jiefang break down
FAW JH6 6x4 prime mover rated to 460hp (343kW)

CNH Industrial (CNHI) has ended Iveco sale talks with China’s FAW Jiefang abruptly, a matter of weeks after positive reports on their progress.

The news comes just three weeks after the Chinese truckmaker was said to have undertaken due diligence on its European rival, with a view to making a formal offer in a matter of a few months, and 20 months since CNHI revealed it plans to part ways with Iveco.

No reason was given for the move, in a terse message, and FAW is yet to respond publically.

"CNH Industrial confirms that it is has terminated discussions with FAW Jiefang with regard to the Company’s On-Highway business, and is continuing to pursue its existing plans for a spin-off of these activities in early 2022," CNHI says in a statement.

"CNH Industrial believes there are significant opportunities to develop its On-Highway business by accelerating the deployment of ever more sustainable transport solutions and infrastructure, in line with the EU’s Green Deal ambitions."

Read how CNHI announced it Iveco spinoff, here

The talks began last year, though an initial FAW valuation of Iveco at around Euro3 billion (A$4.66 billion), at about a fifth of its present Milan stock market value, slightly inflated by previous news of the talks, was rejected.

It has been speculated that Iveco’s finance arm could be an impediment to such a sale, given that it would invite European regulatory hurdles.

The Italian government welcomes the termination of talks, viewing heavy truck construction as "a strategic national interest", international news agency Reuters reports.

Italy had earlier signalled it was prepared to veto the sale.

FAW Jiefang Group builds medium, heavy and light trucks and buses to the tune of more than 300,000 units, along with diesel engines.

Any takeover would have given the Chinese company a box seat to view Iveco’s battery-electric trucks link with US firm Nikola, which aims to use the S-Way as the basis for the heavy-duty Nikola Tre, and build on the FAW’s self-driving technology link with tech firm Plus.

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