Traton, Volkswagen’s commercial vehicle group that owns Scania and MAN, has offered $2.9 billion to take control of American truck and bus manufacturer Navistar, building on the 17.9 per cent of Navistar shares that it has held via MAN since 2016.
The acquisition would take Traton one step closer to being a true global player in the heavy commercial market, given its already substantial presence in Europe (Scania and MAN) and parts of South America (VW).
Currently Navistar has around 15 per cent of the North American market. Its vehicle brands include International Truck, IC Bus, and Navistar Defense.
Traton also has a 25 per cent share in the Chinese manufacturer Sinotruk and a strategic partnership with the Toyota’s Hino subsidiary, but 60 per cent of its sales are currently generated in Europe.
The Traton offer is generous: a 45 per cent premium over the trading price of Navistar shares at the time of offer. However, Navistar said the offer was unsolicited and needed careful review. At the turn of the year, the company announced it would reduce its workforce by 10 per cent in response to declining demand for heavy trucks.
The news follows increasing collaboration between Traton and Navistar in recent years, the companies having been party to a strategic technology and supply cooperation, as well as a procurement joint venture. The partnership was announced in 2016 by Traton, then Volkswagen Truck & Bus, simultaneously with its acquisition of a 16.6 per cent equity stake in Navistar.
Andreas Renschler, Traton chief executive, said: “Over the past three years, we have benefited 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.”
In a separate development, Volvo Group is selling its Japanese truck-making subsidiary UD Trucks (formerly Nissan Diesel), to fellow Japanese manufacturer Isuzu Motors for a reported $2.3 billion. Isuzu is strong in light to medium-weight trucks, while UD Diesel’s line-up is dominated by medium and heavy designs. Isuzu will gain access to Volvo’s electric driveline technology through the deal.