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New VW Bid Cinches Deal to Acquire Navistar

Last-minute bid will give Traton unit access to N. America
#europe #Navistar #americas

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Volkswagen has agreed to acquire U.S. commercial truck and bus maker Navistar in a last-minute deal worth about $3.7 billion.

VW’s Traton commercial truck unit prevailed by winning over Navistar’s two biggest shareholders—tycoon Carl Icahn and hedge fund MHR Fund Management—with a “final-final” bid at $44.50 per share.

Freightliner Class 8 truck  (Image: Freightliner)

Persistence Pays

Four years ago, VW bought nearly 17% of the Lisle, Ill.-based truckmaker for $225 million.

In January, Traton offered to acquire the remainder of Navistar’s shares at $35 each. At the time, the stock was trading at $27. Navistar’s board rejected the offer, and talks were suspended by the COVID-19 pandemic.

Talks revived in September, when Traton hiked its bid to $43 per share, or $2.9 billion. But on Oct. 16—as its “final” offer was about to expire—Traton agreed to the $44.50 share price to secure the deal.

The sale awaits final due diligence by Traton, final signoff by both boards and a formal vote by Navistar’s shareholders.

Gateway to N. America

Traton, which sold 242,000 vehicles worldwide last year, markets a wide range of commercial vehicles under its MAN, Scania and VW brands. But the company has no presence in North America, the world’s largest market for heavy trucks with some 3.9 million Class 8 highway rigs operating in the U.S. alone.

Buying Navistar will give Traton another brand and immediate access to an established dealer network in the region.

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