VW says it will purchase a major stake in Navistar

CHICAGO — Volkswagen plans to take a 16.6 percent stake in Navistar International as part of a wide-ranging alliance that gives the manufacturer access to products and services of the German automaker’s truck and bus business.

Navistar, based in suburban Chicago, will receive a $256 million equity investment from VW, which will pay $15.76 a share. That’s a 12 percent premium to Navistar’s closing stock price on Friday.

VW’s bus and truck unit also will have the right to appoint two directors to the board of Navistar, which makes commercial and military trucks, diesel engines and buses. Navistar is fond of saying that almost half of North American children who take buses to school are riding in Navistar buses.

The deal involves two companies that have found themselves in emissions scandals.

It was revealed last year that Volkswagen sold hundreds of thousands of diesel cars and SUVs that contained illegal software to cheat U.S. emissions tests. Navistar earlier this year agreed to pay a $7.5 million penalty to settle Securities and Exchange Commission charges it misled investors about developing an advanced technology truck engine that could be certified to meet U.S. emission standards.

On Thursday, Navistar is scheduled to report its third-quarter financial results. In the second quarter, the company, which has been cutting costs in the face of slower than expected U.S. market share growth and weaker export markets, reported its first quarterly profit in more than three years.

Navistar said it expects the alliance with VW to result in “significant synergies.” Synergies is often business-speak for layoffs, but a Navistar spokeswoman said that’s not the motivation for the VW deal.

Navistar shareholders include activist investor Carl Icahn.