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Navistar International Hood

Traton closes in on $3.7 billion Navistar acquisition

Oct. 19, 2020
Volkswagen AG's commercial truck division would acquire the U.S. producer of International trucks, engines and IC Buses for $44.50 a share

Volkswagen AG’s commercial truck division is closing in on a deal to acquire Navistar International Corp. for nearly $3.7 billion, according to a statement from the U.S. truckmaker’s Board of Directors on Oct. 16.

VW’s Traton SE would purchase remaining Navistar stocks for $44.50 per share in cash, according to a letter from Navistar’s board. Earlier this week, Traton had given Navistar an Oct. 16 deadline to accept the offer for all common stock not already owned by the VW subsidiary.

VW's Traton purchased its initial stake in Navistar in September 2016, laying the groundwork for a North American market footprint. On Jan. 30, 2020, Traton, which now holds 16.8% of Navistar stock, offered to buy the rest of Navistar for $35 per share, or $2.9 billion. In response to finalizingNavistar’s Board’s feedback, on Sept. 10, Traton upped its proposal to $43 per share for all of Navistar’s outstanding shares. 

In the Oct. 16 letter to Traton from Troy A. Clark, Navistar’s executive chairman, he asked the German company to confirm that a price of $44.50 per share is a basis for finalization of definitive agreements. 

Navistar, which was founded at International Harvester Co. in 1902, is based in Lisle, Ill., and currently produces International commercial heavy- and medium-duty trucks, diesel engines, and IC Bus school and commercial buses. Traton is a subsidiary of Volkswagen AG and a commercial vehicle manufacturer worldwide with its brands’ MAN, Scania, Volkswagen Caminhões e Ônibus, and RIO. In 2019, Traton sold around 242,000 vehicles. Traton manufactures light-duty commercial vehicles, trucks, and buses at 29 production and assembly sites in 17 countries. 

JP Morgan and PJT Partners are acting as Navistar's financial advisors. Sullivan & Cromwell LLP is providing legal counsel.  Brunswick is providing communication counsel.

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