Volkswagen Throws Down in Bid to Buy Navistar, Create Heavy Truck Giant

Corey Lewis
by Corey Lewis
volkswagen throws down in bid to buy navistar create heavy truck giant

When they’re not preparing to sell an ultra luxury super car brand or creating a new line of electric vehicles, they’re planning a big time merger for a larger piece of the heavy-duty truck market.

It’s only gonna cost them a few billion dollars.

Volkswagen’s commercial vehicle subsidiary, Traton SE, is currently one of the largest manufacturers of commercial vehicles in the world. The company was known until 2013 as Volkswagen Truck & Bus AG before VW decided on a less singular sounding name. Under the brand’s umbrella is MAN, Scania, and Volkswagen Trucks and Buses of Brazil. Last year the company sold roughly 242,000 vehicles globally, in the light-, medium-, and heavy-duty segments. But they didn’t sell anything in North America, which is where Navistar comes in.

Navistar has existed since 1986, when it was formed to contain what were previously the assets of International Harvester. The company’s current brand is International, and it makes trucks, buses, engines, and military vehicles. Its primary market is North America, which makes it extra tasty for Traton. Last year the company built 106,500 vehicles.

Currently Traton owns 16.8 percent of Navistar, but wants the rest of the shares. Its most recent share offer was $43 per, but it upped the ante on Friday to $44.50. If the deal goes through Traton would write a check for $3.7 billion, which would value Navistar’s entire operation at $4.4 billion. The two companies have agreed “in principle” that Traton will acquire all shares, but the paperwork’s not finalized yet. Hurdles include the due diligence, lawyer things like terms of the merger and documentation, and board approval at VW and Navistar.

The companies have been negotiating for a while now, and the share price offers from Traton have escalated under pressure from the board of Navistar. Traton started off with an initial price per share of $35. That was after the German firm had to convince billionare Carl Icahn to sell the 16.8 percent of Navistar shares he owned via an investment fund.

The market believes the deal will go through, as Navistar shares on Friday increased in value by 23 percent, to $43.55. Look for an announcement soonish on Traton-Navistar Global Truck Industries.

[Image: Navistar]

Comments
Join the conversation
2 of 8 comments
  • Akear Akear on Oct 20, 2020

    Yet another American icon falls. I thought America was suppose to be good at making trucks.

  • Millerluke Millerluke on Oct 20, 2020

    Why the hell would a company that can't make compliant diesels buy a company that can't make a decent diesel or DPF system? Maybe cause no one else wanted International? The company I work for refuse to buy Internationals now, unless they absolutely have to - they'd rather spend upwards of $20,000 more for a Peterbilt or Kenworth!

  • GrumpyOldMan "A manual transmission is offered, as is a single-clutch auto. "What is a single clutch auto?
  • ToolGuy It is raining super-hard outside right now.
  • Analoggrotto It's getting awful hard to tell these Mercedes apart from one another.
  • Analoggrotto Ah the Fisher Price car for the uncoolest of uncool dad-bods.
  • FreedMike If it were a GLI, it’d be a decent project car. But at the end of the day you have a base Jetta, and those weren’t all that great. Speaking of project VWs - when I was living at my old house a few years ago, one of my neighbors had an OG 1983 GTI sitting on his lawn. Lord, did I want to take that car home.
Next