VW Board Okays Navistar Purchase
Volkswagen Group has approved the plan by its Traton commercial truck unit to acquire Illinois-based Navistar International for $3.7 billion.
VW—whose Traton affiliate consists of Scania, MAN and VW Commercial brand vehicles—began thinking about buying a stake in Navistar in 2012. The company finally agreed in 1996 to acquire nearly 17% of the American truckmaker.
New Brand, New Market
Now VW Group will loan Traton $3.9 billion to buy Navistar’s outstanding shares at $44.50 each. VW and two other stockholders (investor Carl Icahn and hedge fund MHR Fund Management) currently hold half of Navistar’s equity.
VW expects the acquisition will be completed by mid-2021. The deal will give Traton another brand. Far more important, the business will gain a well-established dealer network in North America—the world’s largest heavy truck market.
Separate EV Track
This is Traton’s second expansionary move in two weeks.
The unit signed a deal at the end of October with Toyota’s Hino Motors truck unit to bolster its electric vehicle capabilities. The agreement expands a non-equity partnership that began in 2018 and was extended a year later to include pooled procurement.
Under the new agreement, Hino and Traton will create EV teams in Sweden and Tokyo. Their goal is to develop common electric-truck platforms for commercial vehicles powered by batteries and fuel cells.
Traton has said it will invest some $1.2 billion on electrification over the next five years.
What It Means
VW has been struggling for years to wring cost efficiencies out of its Scania and MAN brands. Buying Navistar won’t solve that problem. But it will give Traton immediate access to a huge new market for those brands.
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