Nearly six months since Navistar announced its pending partnership with Volkswagen (VW) Truck & Bus, the deal closed Tuesday, making VW’s investment in Navistar official.
Effective with the Feb. 28 closing of the alliance, Volkswagen Truck & Bus acquired approximately 16.2 million newly issued shares in Navistar – a 16.6 percent stake – in exchange for $256 million.
The closing of the partnership signals that both companies have received all necessary regulatory approvals, the finalization of agreements relating to a procurement joint venture and a technology and supply collaboration, and have satisfied all other customary closing conditions.
In the near term, the new partnership will focus on developing common power train systems that are set to be delivered to North American customers by 2019, according to the companies’ original announcement in September.
Navistar Chairman, President and CEO Troy Clarke called the deal a “significant milestone in our company’s history,” adding, “and we expect it will create multiple benefits for both companies in both the near and long term.”
Now that the transaction has closed, Clarke says the companies’ collaboration will move quickly “to increase our global scale, strengthen our competitiveness, and provide our customers with expanded access to cutting-edge products, technology and services.”
VW Truck & Bus CEO Andreas Renschler says the newly-founded purchasing cooperation will begin work immediately.
As part of the alliance agreement, Renschler and VW Truck & Bus CFO Matthias Gründler join Navistar’s board of directors.
“Their expertise in commercial vehicle production will be invaluable as we strive to become the North American champion in our industry,” Clarke says.