Volkswagen takes stake in Navistar, to supply powertrain by 2019
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Volkswagen Takes Minority Stake in Truck Maker Navistar
Volkswagen takes stake in Navistar, forms alliance
Navistar, Volkswagen Announce ‘Wide Ranging Strategic Alliance’
Volkswagen Truck & Bus is taking a 16.6% equity stake in Navistar International Corp. as part of a “wide-ranging strategic alliance” that will initially focus on providing powertrains for Navistar trucks starting in 2019.
The joint venture is based on four pillars:
1. The equity investment. Volkswagen Truck & Bus will acquire 16.2 million newly issued shares in Navistar, representing 16.6% of post-transaction undiluted common stock (or 19.9% of pre-transaction outstanding common stock). It will pay $15.76 per share or a 25% premium over Navistar's 90-day volume weighted average price as of August 31, or 12% over Navistar's closing price on September 2. Navistar will receive $256 million from the equity investment to be used for general corporate purposes.
2. Technology sharing. The two companies will collaborate on technology for powertrain systems, as well as other advanced technologies. It will focus on powertrain technology solutions, with VW supplying engines and other powertrain components by 2019, according to Andreas Renschler, CEO of Volkswagen Truck & Bus. It also will explore collaboration in other areas, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis components. This collaboration will allow the companies to share some of the costs of future vehicle development.
3. A procurement joint venture. Pursuing joint global sourcing opportunities for parts for both companies will give both greater scale and competitiveness. It also can create improved pricing for end customers.
4. Governance. Navistar will add two Volkswagen Truck & Bus representatives to its board of directors, and a separate board will be formed to oversee the alliance.
When asked how the deal will affect Navistar's deal with Cummins, which is supplying some three-quarters of the engines going into International trucks, Troy Clarke, Navistar president and CEO, said, “We anticipate we will continue to offer Cummins products for ...Read the rest of this story