Volkswagen raises Navistar bid to $44.50/share to clinch trucks deal

By Edward Taylor (Reuters) - Volkswagen's trucks business Traton said on Friday it had agreed to raise its takeover bid for Navistar International Corp to $44.50 per share from $43, closing in on a deal that would extend its reach into North America. A successful merger would combine the MAN, Scania and Volkswagen trucks brands with Navistar to create a global manufacturer, at a time when the industry is seeking ways to share the costs of developing low emissions technology.

Reuters October 17, 2020 01:05:55 IST
Volkswagen raises Navistar bid to $44.50/share to clinch trucks deal

Volkswagen raises Navistar bid to 4450share to clinch trucks deal

By Edward Taylor

(Reuters) - Volkswagen's trucks business Traton <8TRA.DE> said on Friday it had agreed to raise its takeover bid for Navistar International Corp to $44.50 per share from $43, closing in on a deal that would extend its reach into North America.

A successful merger would combine the MAN, Scania and Volkswagen trucks brands with Navistar to create a global manufacturer, at a time when the industry is seeking ways to share the costs of developing low emissions technology.

At $44.50 per share, Traton would pay about $3.7 billion for the shares in Navistar it doesn't already own, valuing the U.S. business as a whole at around $4.4 billion.

"Traton SE and the U.S.-American truck manufacturer Navistar International Corporation, in which Traton already holds a stake of 16.8%, have today reached agreement in principle that Traton will acquire by merger all shares in Navistar not already held by Traton, at a price of $44.50 per Navistar share," Traton said in a statement.

A deal hinges on finalising due diligence, agreeing merger terms and related transaction documents and approval by the executive bodies of Navistar and Volkswagen, Traton said.

"There is no assurance that the parties will reach agreement on definitive transaction documentation, or as to the terms thereof or that any transaction, if such agreement is reached, will ultimately be consummated," Traton cautioned. 

The announcement follows hours of negotiations, with Navistar's board saying the offer would need to be raised to $44.50 per share to win shareholders' backing, hours before Traton's $43 per share offer was due to expire.

Traton had already raised its initial $35 per share offer last month.

Navistar shares were last up 22.9% at $43.53. Traton shares ended up 1.6% at 18.02 euros.

Traton has struggled to win over billionaire activist investor Carl Icahn, whose fund held a 16.8% stake in the U.S. truck maker as of June 30, according to Refinitiv Eikon Data.

Icahn and two other activist funds, Mark Rachesky's MHR Fund Management and Gabelli Funds, together own about 40% of Navistar's shares, according to Refinitiv data.

(Additional reporting by Uday Sampath in Bengaluru and Joern Poltz in Munich and Edward Taylor in Frankfurt; Editing by Edmund Blair and Mark Potter)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.