Navistar reaches definitive agreement for merger with Volkswagen’s truck unit

Navistar has reached a definitive merger agreement with Volkswagen’s truck unit to sell the rest of its outstanding shares. JEFF GUERINI/STAFF
Navistar has reached a definitive merger agreement with Volkswagen’s truck unit to sell the rest of its outstanding shares. JEFF GUERINI/STAFF

Navistar has reached a definitive merger agreement with Volkswagen’s truck unit to sell the rest of its outstanding shares in a transaction that is expected to close next year.

The agreement will have Volkswagen’s heavy-truck unit Traton SE acquiring Navistar for a total of $3.7 billion. Traton announced last month that it would be willing to purchase the remainder of Navistar stock that it did not already own for $44.50 per share.

Traton currently has a 16.7% stake in Navistar.

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Talks between the two companies about a possible acquisition started in January when Traton made an original offer to purchase those shares for $35 per share in cash. That offer increased to $43 per share in September.

However, in October, representatives of Navistar said they were prepared to move forward with the deal for $44.50 per share in cash. That deal was supported by two of Navistar’s largest shareholders, American businessman Carl Icahn and MHR Fund Management.

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