After long negotiations, the deal is in place: Traton takes over the American group for shares worth 3.2 billion euros. In the heavy commercial vehicle market segment, the VW truck holding company can now take on the battle with its strong rival Daimler.
Dhe VW truck holding Traton is now getting involved with its planned entry into the American market with a billion-dollar acquisition. After a tough struggle, Volkswagen reached an agreement with the American truck and bus manufacturer Navistar on the recently controversial price – the door to the important North American commercial vehicle market is now wide open. The price for the urge to expand: Traton has to shell out around 3.7 billion dollars (3.2 billion euros) for the shares in the group that the Munich-based company does not yet own.
“We are delighted to have reached an agreement in principle on a transaction after intensive negotiations with Navistar,” said Traton boss Matthias Gründler. VW has held a stake of around 16.8 percent in Navistar for a number of years; so far, the collaboration has been limited to collaborations in a few fields. After years of speculation about a complete takeover, VW revealed the cards in January.
Challenge to Daimler
With the takeover, VW wants to get a foot in the door of the important American market and strengthen its heavy commercial vehicle business so as not to leave the field to its strong rival, Daimler. With its brands MAN, Scania and Volkswagen Caminhoes e Onibus, VW is particularly strong in Europe and South America. But with the lead on the American market, Daimler’s Stuttgart-based company is world market leader in heavy trucks. Daimler’s Freightliner truck brand and Thomas Built buses are particularly well-known in the United States.
Among other things, the corona crisis was not conducive to talks between Volkswagen’s commercial vehicle division and the hesitant major Navistar shareholders. In addition, star investors Carl Icahn and Mark Rachesky wanted more money for their shares with his hedge fund MHR. Even the offer, which was initially increased from 35 to 43 dollars per share in September, was not enough for them, according to reports. After VW had set an ultimatum until this Friday in the middle of the week, things went quickly. Now it should be $ 44.50 per paper.
The basic agreement is subject to a satisfactory audit for Traton and the conclusion of the merger agreement, said Volkswagen. $ 44.50 is an acceptable basis for entering into binding agreements, wrote the Traton management in a letter to Navistar boss Troy Clarke. This in turn had previously announced in a letter on Friday afternoon that such an offer would be approved by Icahn and Rachesky.
Navistar’s share price fell sharply after VW’s ultimatum as investors saw the chances of a deal dwindling. On Friday, the paper climbed again by 23 percent to $ 43.56.
The commercial vehicle business of VW and other providers is particularly suffering from the Corona crisis. Hardly any freight forwarder ordered large, expensive trucks in the first six months of the year without knowing how the economy was starting up again. But even without the corona pandemic, the industry faced a weak phase because business fluctuates greatly with economic cycles. Traton also wants to cut costs on a large scale. At MAN, 9500 of a total of around 39,000 jobs are at stake, and at Scania, too, 5,000 jobs are to be cut.