Volkswagen takes minority stake in truck maker Navistar
LONDON — Volkswagen said Tuesday that its truck and bus business had agreed to acquire a 16.6 percent stake in the Navistar International Corp., an American commercial truck maker, giving it greater access to the North American commercial vehicle market.
The stake will make the German automaker one of the biggest shareholders of Navistar, along with activist investor Carl C. Icahn.
The deal came two years after Volkswagen gained full control of the Swedish truck supplier Scania and combined it with the German truck maker MAN and other parts of its business to create its truck and bus unit, which primarily sells vehicles in Europe and South America.
The alliance also emerged a little over two months after Volkswagen agreed to pay up to $14.7 billion to settle claims from an emissions cheating scandal in the United States related to its diesel passenger vehicles.
“Closer collaboration among our existing brands was a top priority for our commercial vehicles business and we are well on track in this context,” Andreas Renschler, the Volkswagen Truck & Bus chief executive, said in a news release. “We are now taking the next step on our way to becoming a global champion in the commercial vehicles industry.”
The transaction is subject to regulator approval and is
expected to be completed later this year or in early 2017.
Volkswagen has said that it is looking to expand the truck and bus business to new regions and wants the business to become a “worldwide leading commercial vehicles group” within a decade.
The business sold 179,000 medium- and heavy-duty trucks and buses last year. By comparison, Volkswagen overall sold 9.9 million vehicles in 2015.
Under the terms of the deal, Volkswagen Truck & Bus will purchase a 16.6 percent stake in Navistar for $15.76 a share, or about $256 million. The transaction represents a 12 percent premium to Navistar’s closing price Friday.
Volkswagen has agreed to hold those shares for three years and will get the right to appoint two directors to Navistar’s board, Navistar said.
“We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy,” Troy A. Clarke, the Navistar president and chief executive, said in a news release.
The companies said they would collaborate on strategic technology and establish a joint venture for purchasing, initially focusing on common powertrain systems.
Navistar, whose brands include International and IC Bus, said the alliance would give it greater scope and scale for purchasing, as well as strengthen its liquidity position and expand its financial flexibility.
By the fifth year of the alliance, Navistar, which stressed it would remain independent, said that it expected to generate at least $200 million in annual cost savings.