After almost 10 months of negotiations, Volkswagen subsidiary Traton has reached a deal to buy Navistar for nearly USD 3.7 billion. The deal comes at a time after the industry witnessed a record slump in truck order for two consecutive months. Traton, the commercial truck business of Volkswagen, has closed the deal of purchasing Navistar at USD 44.50 per share. This is an increase from its last offer of USD 43 per share. Navistar sat for around two months on the deal before accepting it just ahead of its expiry date. With this deal, Volkswagen is looking to extend its reach into the market of North America.
An increase of a buck-fifty might look little, but when a company owns almost 17 million shares it surely going to make a huge difference. Traton CEO Matthias Gründler issued a statement announcing the deal. Gründler said the two companies reached an agreement after a lot of negation. “We are now awaiting the necessary approvals to welcome the new Traton family member.” The deal holds significance as it comes at a time when the industry is facing one of the worst ever crisis and trying to find ways to share technologies for better result. The deal will bring Scania, MAN, and Volkswagen truck brands under one roof with Navistar to create a global manufacturer.
Earlier in 2016, Traton and Navistar and had partnered to increase the capability of both the companies. Traton had acquired a 16.8 per cent stakes in Navistar International Corporation under the partnership. Under the partnership, Traton was scheduled to develop self-driving trucks. The talks for acquisition began way back in 2015. The two companies have already some common interests. Both of them hold a minority position in TuSimple, a self-driving tech company. Earlier, Traton tried hard to win over Carl Icahn who held a 16.8 per cent stake in the truck maker as of June 30. Icahn is also expected to make some money on the deal.