Daily Management Review

Volkswagen buys US truck manufacturer Navistar for $3.7B


The Traton Group, a subsidiary of Volkswagen, which produces trucks, announced on Saturday the purchase of its American competitor, Navistar International.

Traton, which already owns about 16.7% of Navistar, is buying the remaining 83.3% of the company for $3.7 billion, bringing the total value of the American company to $4.4 billion.

Traton will pay Navistar shareholders $44.5 in cash per share. The transaction is expected to be completed by mid-next year. The fact that Traton made an offer to buy Navistar became known back in January, when the media wrote about the need to convince the activist investor Carl Icahn, who owns approximately 17% of the company, to close the deal. Since then, the offer has been raised: first it was $35 per share and then - $43 per share; the parties eventually agreed on $44.5.

VW will provide Traton with a $3.9 billion loan to pay for the transaction. Buying Navistar should help Traton, which brings together different truck brands owned by VW, including Man and Scania, to expand its presence in the North American market. The American market accounts for only 2% of Traton sales, while Navistar controls about 15% of the American truck market.

source: bloomberg.com