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Navistar Agrees to VW's $4.4B Takeover Offer

Oct. 21, 2020
A months-long pursuit for sole ownership of the commercial truck and diesel engine manufacturer will end with Navistar as part of the Traton portfolio, with MAN, Scania, and VW Caminhões.

Navistar International Corp. will accept a takeover offer by Volkswagen AG's commercial truck-building subsidiary Traton, which announced it had raised its early-September bid to an estimated $4.4-billion. The combination would bring Navistar — manufacturer of International brand commercial trucks and diesel engines — together VW's MAN, Scania, and Volkswagen Caminhões e Ônibus brands, along with the RIO digital services program, into a global organization able to distribute administrative, purchasing, product development, and other costs.

"Traton SE and the U.S.-American truck manufacturer Navistar International Corporation, in which Traton already holds a stake of 16.8%, have today reached agreement in principle that Traton will acquire by merger all shares in Navistar not already held by Traton, at a price of $44.50 per Navistar share," Traton announced on October 16.

Navistar's largest shareholder is financier Carl Icahn, with 16.9%, and that stake along with two other activist shareholder funds comprise 40% of Navistar shares.

Traton's starting, $2.9-billion bid in January has been steadily raised over the course of this year. VW has made clear it aims to be the sole shareholder of Navistar, and last month Navistar directors made it clear the manufacturer would be available at a suitable price.

Traton has held its share of Navistar since 2016 and the two maintain a purchasing alliance. They jointly developed Navistar’s A26 12.4-liter engine, based on MAN AG's D26 engine.