Navistar International Closes Strategic Alliance with Volkswagen
Navistar International Corporation announced the closing of its wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar by Volkswagen Truck & Bus and framework agreements for a procurement joint venture and strategic technology and supply collaboration.
“This alliance with Volkswagen Truck & Bus marks a significant milestone in our company’s history, and we expect it will create multiple benefits for both companies in both the near and long term,” said Troy Clarke, chairman, president and CEO, Navistar. “Now that the transaction has closed, we will move quickly to collaborate with an industry-leading, strategic partner to increase our global scale, strengthen our competitiveness, and provide our customers with expanded access to cutting-edge products, technology and services.”
“The authorities have given our strategic alliance with Navistar the green light. Our newly-founded purchasing cooperation will begin work immediately. This puts both partners in a stronger position for the future. The strategic alliance provides Volkswagen Truck & Bus with access to the all-important North American market. This is a major step toward becoming a global champion,” said Andreas Renschler, CEO of Volkswagen Truck & Bus.
With the closing of the alliance, Volkswagen Truck & Bus acquired approximately 16.2 million newly issued shares in Navistar, representing 16.6% of post-transaction undiluted common stock (or 19.9% of pre-transaction outstanding common stock), effective Feb. 28, 2017. As a result, Navistar receives $256 million to be used for general corporate purposes.
As part of the alliance agreement and in line with Volkswagen Truck & Bus’s ownership stake, Renschler and Matthias Gründler, chief financial officer of Volkswagen Truck & Bus, are joining Navistar’s board of directors.
“We are excited to welcome Andreas Renschler and Matthias Gründler to the Navistar Board, and are confident that we will benefit from their deep industry knowledge and fresh perspectives,” said Clarke. “Their expertise in commercial vehicle production will be invaluable as we strive to become the North American champion in our industry.”
Global Truck & Bus Procurement LLC, the procurement joint venture created by Navistar and Volkswagen Truck & Bus, will start work effective immediately. As part of the alliance, it will create new opportunities for quality improvement and cost reduction, and will enable both companies to benefit from increased global scope and scale. The joint venture is operating out of Navistar’s headquarters in Lisle, Illinois, and comprises representatives from both companies who will be combining the demand of five brands, including Volkswagen Truck & Bus’s Scania, MAN and Volkswagen Caminhões e Ônibus, in addition to Navistar’s own International and IC Bus brands.