Fiat Power Train, universally known as FPT, is part of the Iveco Group which encompasses eight major divisions ranging from defence contractors to fire appliance manufacture.

Yet the corporate world is never at ease with itself, so the news that Iveco itself has been purchased by Tata Motors Ltd of India should not come as too great a shock.

Iveco is often considered as being part of CNH, however, it was spun off in 2022 to operate as a stand-alone company, a move that had been in planning for three years beforehand.

The reasons for that particular demerger was that the on-road and off-road vehicle markets were diverging. CNH were to focus on the off-road sector while the commercial vehicle industry would be catered for by Iveco.

CNH and Iveco also come to the decision to spin off the latter for financial and managerial reasons, citing investment priorities and greater flexibility through not being tied to each other's separate interests.

However, 27% of Iveco's shares were still held by Exor NV, the holding company of the Agneli family, best known for the Fiat brand.

For Tata, the rationale behind the purchase is that Iveco provides a ready-made platform upon which to grow its commercial vehicle business.

PB Balaji, group chief financial officer at Tata Motors, points out that the commercial vehicle sector is a steady business with little disruption.

Therefore, to grow organically will a take good deal longer than purchasing a firmly established player in the market.

Yet the jewel in crown remains FPT, for Balaji also notes that buying Iveco will enhance the capabilities of the powertrain division.

It is also stated that Tata Motors will benefit from access to Iveco’s advanced investments in the areas of technology and alternative energy, while Iveco will come to enjoy what is described as the 'frugal engineering' expertise of Indian manufacturing.

The two companies had been discussing the merger for at least six months, with the cost to Tata being €3.8 billion and is dependent upon the successful prior disposal of Iveco's defence business.

FPT is a major player in the agricultural engine market, for not only does it provide the motors for Case and New Holland but also Argo Tractors and Claas, amongst others.

With regards to trading relationships already in place, Tata does not see the deal displacing Cummins engines from its commercial vehicles.

While it is unlikely that CNH will start looking for an alternative engine supplier, its hands are no longer tied.