Commercial vehicle giant Traton SE has entered an agreement to fully purchased US truck manufacturer Navistar International Corporation for around US$3.7 billion (NZ$5.4b).
Germany-based Traton is a subsidiary of the Volkswagen Group and one of the world’s largest commercial vehicle manufacturers with brands such as MAN and Scania.
It currently owns 16.7% of the outstanding shares of common stock of Navistar.
Navistar is based in Lisle, Illinois and operates as the owner of International brand of trucks and diesel engines.
Traton will become the owner of all of the outstanding common shares of Navistar at a price of US$44.50 per share in cash.
It builds on a strategic alliance between the two companies which started in March 2017 which saw increased purchasing scale and the integration of new technologies.
Traton says it already has a strong position in Europe and South America and hopes the Navistar acquisition will build a “complementary footprint in North America to create a global company well-positioned to benefit from enhanced brand performance, increased innovation and industry-leading capabilities”.
Traton chief executive Matthias Gründler says the deal expands his company’s reach across key truck markets worldwide.
“Together, we will have an enhanced ability to meet the demands of new regulations and rapidly developing technologies in connectivity, propulsion and autonomous driving for customers around the world.
“Navistar has been a valuable partner, and we are confident this combination will deliver compelling strategic and financial benefits, create enhanced opportunities for both Navistar and Traton, and best position us to drive sustained value in the evolving global commercial vehicle industry,” Gründler says.
Navistar president and chief executive Persio Lisboa says the deal supports employees and customers and adds value to shareholders.
“We look forward to continuing to work with the Traton team to create opportunities for our employees and provide an outstanding experience for our customers and dealers through best-in-class products, services and technologies.”
Gunnar Kilian, Volkswagen AG board of management member responsible for the Truck and Bus division, says the deal is an “important milestone for Volkswagen”.
The deal underpins a “strong strategic commitment to continue driving growth also during the ongoing challenging economic climate,” he says.
“The acquisition of Navistar will significantly leverage Traton’s positioning in North America, one of the biggest and most profitable markets for heavy trucks.
“Together, the companies can enhance scale and reach in key markets as well as create further synergies,” Kilian says.
The transaction is targeted to close in mid 2021, and is subject to Navistar shareholder approval, customary closing conditions as well as regulatory approvals. Major shareholders Icahn Capital LP and MHR Fund Management LLC have agreed to vote their shares in favour of the transaction.
Traton is a subsidiary of the Volkswagen Group and one of the world’s largest commercial vehicle manufacturers with brands such as MAN and Scania.
