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Volkswagen has upped its offer to buy Navistar International to $3.6 billion.

VW’s Traton heavy-truck subsidiary already owns nearly 17% of the U.S. company. VW, which acquired the stake in 2017, considers Navistar’s strong dealer network as a North American beachhead for its MAN and Scania truck brands.

No-Rival Bid?

Traton offered $35 per share in January to vacuum up the remainder of Navistar for $2.9 billion. Negotiations were suspended as the coronavirus pandemic spread.

Last week Bloomberg News reported that the VW unit was eager to resume talks. The company is now offering $43 per share, with VW confirming it will fund the 23% richer bid.

Bloomberg says a buyout—unlikely to prompt a rival bid—appears inevitable. The only big question is price. Navistar shares climbed nearly 14% to close earlier today to a three-year high of nearly $41, after sagging to $15 at the end of March.

Attractive Market

Traton’s brands account for annual worldwide sales of some 242,000 buses and trucks ranging from light- to heavy-duty rigs, according to the company. But they have no presence in North America, the world’s largest big-truck market.

Daimler’s Freightliner brand dominates in the region with nearly 37% of heavy-truck sales in the American market. International ranks fourth at about 14%, behind PACCAR’s Peterbilt and Kenworth brands at 15% each.

Medium and heavy truck sales are likely to grow by a compound average rate of 14% through 2025, according to an analysis by Research and Markets.

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