TRATON Proposes Buyout of Navistar

A subsidiary of Volkswagen has made an unsolicited bid to buy out Navistar International Corp., a manufacturer of diesel engines with a major factory in Huntsville.

On January 30, Navistar confirmed that it had received an unsolicited proposal from TRATON SE proposing a cash buyout of common stock of Navistar, seeking to acquire the company for $35 per share in cash.

Navistar officials say their board is considering the offer consistent with its fiduciary duties.

TRATON SE is a subsidiary of The Volkswagen Group and says that the offer price of $35 per share in cash is a 45 percent premium over Navistar’s closing share price of USD 24.11 on January 29, 2020 and a 19 percent premium over Navistar’s 90-day volume weighted average price of USD 29.40. TRATON currently owns 16.8 percent of the outstanding common shares of Navistar.

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TRATON, in a release made public on January 30, said that if the proposal is accepted and the acquisition completed, the combined company would have an enhanced ability to meet the demands of new regulations and rapidly developing technologies in connectivity, propulsion and autonomous driving.

“Over the past three years, we have benefitted from a highly collaborative and productive strategic alliance with Navistar. As the market continues to evolve, we believe there are compelling strategic and financial benefits to a full combination of TRATON and Navistar,” said TRATON CEO Andreas Renschler. “The proposed transaction would create a leader in commercial vehicles with global scale and a strong portfolio of leading brands and cutting-edge products, technologies and services while delivering immediate and substantial value to Navistar stockholders.”

Navistar manufactures International brand diesel engines at its Huntsville plant, Navistar Diesel of Alabama. Currently the plant produces International® A26, a 12.4 liter big-bore engine that is offered on Class 8 on-highway trucks such as the International LT® Series and RH™ Series, as well as in vocational trucks, such as the International HV™ Series and HX® Series.

Navistar Diesel of Alabama plans to expand its manufacturing facilities in Huntsville with a 110,000-square-foot addition. Construction will begin after a groundbreaking ceremony at 10 a.m. on February 11.

In June 2019, Navistar International Corp. announced it would make capital investments of approximately $125 million in expanding its facility in Alabama. The investment also is expected to result in 145 additional jobs.

“Over the last two decades, the state of Alabama has been a wonderful partner for Navistar as we have developed and produced big-bore engines and other products in the state,” said Persio Lisboa, Navistar’s executive vice president and chief operating officer, at the time of the announcement last summer.

With this expansion, Navistar plans to produce the next-generation big-bore powertrains developed by partner TRATON, a partnership that began in 2017 that has allowed the companies to integrate new technologies into their products.

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