After nearly 10 months on the table, and with mutual interest surviving a global pandemic that saw truck orders slump to record lows for two consecutive months, Volkwagen’s commercial truck business, Traton, is set to acquire Navistar for nearly $3.7 billion.
After sitting on an offer of $43 per share for more than a month, Navistar Friday morning countered an expiring “take it or leave it” letter from Traton with a higher asking price of $44.50. The figure put forward by the maker of International Trucks came with the support of the company’s two largest stakeholders: Carl Icahn and MHR Fund Management LLC.
A buck-fifty doesn’t sound like a lot, but when you own almost 17 million shares I guess it doesn’t hurt to ask.
“We are pleased to have reached agreement in principle for a transaction after intensive negotiations with Navistar,” Traton CEO Matthias Gründler said via statement Friday afternoon. “We are looking forward to completing our due diligence and obtaining the necessary approvals in respect of this exciting deal in order to welcome the new Traton family member.”
Navistar and Traton partnered in a procurement joint venture and strategic technology and supply collaboration in 2016, beefing up both companies’ ability to scale globally. Traton also took a 16.8% stake in the Lisle, Illinois truck maker in the tie-up. Dialogue between Navistar and Volkswagen – which also operates the MAN and Scania business units in Europe and abroad – began in 2015 on opportunities to synergize and strengthen each company, culminating in Volkswagen’s investment.
Navistar and Traton are also entangled in some of their business interests. Each holds a minority position in self-driving tech company TuSimple. Traton, as part of the partnership, was slated to develop self-driving trucks for the European market. Navistar was to co-develop SAE Level 4 self-driving trucks targeted for production by 2024.
