Volkswagen truck unit to close on Navistar acquisition by mid-2021

Navistar has reached a definitive merger agreement with Volkswagen’s truck unit to sell the rest of its outstanding shares. Bill Lackey/Staff
Navistar has reached a definitive merger agreement with Volkswagen’s truck unit to sell the rest of its outstanding shares. Bill Lackey/Staff

A transaction that will see Volkswagen’s truck unit purchasing the remaining shares of Navistar for a total of $3.7 billion is expected to close by the middle of 2021.

A definitive merger agreement has been reached. The companies announced last month that they would move forward with a deal. The agreement allows Volkswagen’s truck unit Traton SE to purchase Navistar’s remaining stock for $44.50 per share.

Traton SE already has a 16.7% stake in Navistar. It first proposed acquiring Navistar in January, making an initial offer of $35 per share in cash. That offer was later increased to $43 per share in September.

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Talks escalated in October, when Navistar was given a deadline to accept the offer. Representatives of Navistar then responded to Traton that it would be prepared to move forward with the transaction 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.

During the week in October that Traton implemented its deadline, the price of Navistar’s shares saw a dramatic decrease on the New York Stock Exchange. The price dropped by about 19% and closed at $36 per share in one day.

However, the stock went up two days later to almost 23% and closed at $43.52 per share.

Representatives of both companies said in a recent news release that Navistar and Traton have benefitted from a strategic alliance that started in 2017 and that the transaction will build on that success.

“This transaction builds upon our highly collaborative and successful strategic alliance and further enhances the growth trajectory of the combined company, while delivering immediate and substantial value to our shareholders,” said Persio Lisboa, Navistar’s president and CEO, in the news release.

“We look forward to continuing to work with the Traton team to create opportunities for our employees and provide an outstanding experience for our customers and dealers through best-in-class products, services and technologies," he added.

Navistar employs more than 1,000 people in Clark County and has a manufacturing facility in Springfield, which builds medium-duty trucks as well as cutaway vans for General Motors.

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Mike McDorman, the president and CEO of the Chamber of Greater Springfield, said they want to see continued grow at the Springfield plant and will work quickly to establish a relationship with Traton.

Clark County Commissioner Melanie Flax Wilt previously told the News-Sun that Navistar has had a major presence in the county for decades.

She said that a lot of families in the area rely on employment from or have a connection to Navistar.

“It is always important for us to have a relationship with the businesses here. Whatever we can do as a community to make the new owner feel welcome we will do that," Wilt said last month.

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