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Navistar, Volkswagen Agree on Strategic Alliance
Navistar International Corp. and Volkswagen AG's truck unit announced a strategic alliance that includes a $256 million investment by the German vehicle maker in Navistar as well as planned joint development of powertrain, procurement and other collaborative efforts.
The companies in a Webcast said that Navistar will gain a significant cash infusion, while Volkswagen gains presence in the U.S. truck market for the first time.
Navistar's CEO Troy Clarke and Andreas Renschler, CEO of the Volkswagen unit, on a webcast emphasized the potential for synergy from development of powertrain and other business activities.
"We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy," said Troy Clarke, President and CEO, Navistar. "Over the longer term, it is intended to expand the technology options we are able to offer our customers by leveraging the best of both companies and enabling Navistar to deliver enhanced uptime."
"Closer collaboration among our existing brands was a top priority for our commercial vehicles business and we are well on track in this context," said Andreas Renschler, CEO of Volkswagen Truck & Bus and member of the Board of Management of Volkswagen AG responsible for commercial vehicles.
The statement emphasized that Navistar will be "a leading, independent truck, bus and engine company."
The financial arrangement includes acquisition of 16.2 million Navistar shares by Volkswagen at $15.76 per share, which is 25% more than the average price over a 90-day period ending Aug. 31.
Navistar anticipates $500 million in savings over five years.
Volkswagen is gaining the opportunity to name two Navistar directors.
The alliance is subject to regulatory approvals, with a targeted approval date of late 2016 or 2017.