BY Richard Summerfield
Traton SE, a subsidiary of Volkswagen Group, has agreed to acquire the remaining stake in Navistar International Corp it does not already own, for $44.50 per share. The deal values the company at around $3.7bn.
The deal, which is expected to close in mid-2021, has been approved by Traton’s executive board and supervisory board. The deal has also been approved by Volkswagen’s board.
Traton, which was established in 2018 after the Volkswagen Group separated its truck and passenger car operations, already owned a 16.8 percent stake in Navistar. The Volkswagen group will provide Traton with a loan of $3.9bn, repayable over 12-18 months, to fund the deal.
“Today’s announcement accelerates our Global Champion Strategy by expanding our reach across key truck markets worldwide, including scale and capabilities to deliver cutting-edge products, technologies and services to our customers,” said Matthias Gründler, chief executive of Traton. “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.”
He added: “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.”
“This transaction builds upon our highly collaborative and successful strategic alliance and further enhances the growth trajectory of the combined company, while delivering immediate and substantial value to our shareholders,” said Persio Lisboa, president and chief executive of Navistar. “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.”
The agreement brings to an end a period of uncertainty regarding the future of Navistar. In September, Traton offered $43 per share, but Navistar International’s board of directors rejected the bid on grounds that it significantly undervalued the company. Navistar has since accepted Traton’s sweetened offer, and the company’s largest shareholders, Carl Icahn and MHR Fund Management, have also pledged their support for the deal.
News: Volkswagen truck unit Traton finalises $3.7 billion Navistar acquisition deal