Volkswagen Group’s Traton truck and bus unit has made a $2.9 billion bid to acquire all of the remaining shares in U.S. truck maker Navistar International Corporation, formerly International Harvester Company.
Traton offered a price of $35 per share, which is a 45 percent premium over Navistar’s closing share price of $24.11 on January 29 and a 19 percent premium over Navistar’s 90-day volume weighted average price of $29.40.
Volkswagen Group’s heavy-truck unit currently owns 16.8 percent of Navistar’s outstanding common shares, acquired in September 2016. Since 2017, Traton and Navistar have benefitted from a strategic alliance that has enabled both companies to increase their purchasing power and integrate new technologies.
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Navistar International LT Series
“As the global commercial vehicle industry continues to evolve, Traton believes that the proposed transaction is the logical next step and would result in even greater benefits,” reads VW Group’s statement.
If Navistar accepts the offer, it will give VW a bridgehead in the U.S. heavy-truck market, allowing it to better compete with global rivals Daimler Trucks and Volvo AB. Navistar builds trucks, school buses, defense vehicles and engines under its International brand. Taking control of Navistar will also enable Traton to reduce its reliance on Europe and South America. Traton is currently made up of four brands: MAN, Scania, Volkswagen Caminhões e Ônibus, and RIO.
Navistar International LT Series
“The proposed transaction would create a leader in commercial vehicles with global scale and a strong portfolio of leading brands and cutting-edge products, technologies and services while delivering immediate and substantial value to Navistar stockholders,” said Traton CEO Andreas Renschler. VW’s heavy-truck unit expects that the proposed transaction could be closed by the end of 2020.
The success of Traton’s bid depends on convincing billionaire investors Carl Icahn, Navistar’s biggest holder, and Mark Rachesky, who is the the company’s third-largest owner thanks to a 16 percent stake held through his company MHR Fund Management.
Traton Innovation Day 2019