CEO of Navistar Troy Clarke, said in a statement, “Starting in the near term, this alliance will benefit our purchasing operations through global scope and scale”.
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With few potential partners to choose from, Navistar is tying is fortunes to Volkswagen, which through its acquisition of MAN MANG.DE and Sweden’s Scania [SCVSA.UL] has amassed global truck engine expertise, despite the scandal surrounding the German company’s cheating of emissions tests in diesel cars.
FRANKFURT, Sept 5 Volkswagen will take a 19.9 percent stake in US -based rival Navistar International Corp for around $16 per share as part of a partnership deal, a person familiar with the matter said on Monday. VW also has the right to appoint two directors to Navistar’s board.
The company says it expects “significant” synergies from the strategic technology collaboration, with cumulative synergies ramping up to as much as $500M after five years. The company has agreed to hold the shares for a minimum of three years.
The closing of the share purchase agreement implementing the strategic alliance is subject to certain regulatory approvals, the finalization of the agreements governing the procurement joint venture and the first contract under the technology and supply framework agreement and other customary closing conditions.
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Reuters said the proposed partnership envisions Volkswagen supplying engines to Navistar in exchange for a 19.9 percent stake in the truckmaker. Within the next decade, Volkswagen Truck & Bus aims to become a worldwide leading commercial vehicles group in terms of profitability, innovations for its customers and global presence. Closing is expected to be completed in late 2016 or early 2017.
