Volkswagen Truck & Bus and Navistar are entering into a long-term, strategic alliance based on four pillars

  1. 1

    Equity investment

    Volkswagen Truck & Bus will take a 16.6%
    equity stake (post dilution) in Navistar by way of
    a capital increase (subject to customary closing
    conditions)

  2. 2

    Strategic technology and supply cooperation

    The two companies intend to enter into definitive
    agreements to collaborate on technology for
    powertrain systems, as well as other advanced
    technologies

  3. 3

    Procurement joint venture

    The two companies expect to form a
    procurement joint venture to pursue joint
    global sourcing opportunities

  4. 4

    Governance

    Navistar will add two Volkswagen Truck & Bus
    representatives to its Board of Directors at
    closing of share issuance. Furthermore, the
    parties plan to form a joint Alliance Board to
    oversee alliance arrangements

Volkswagen Truck & Bus equity stake supports the two companies’ alignment and improves Navistar financial flexibility

No. of Navistar common shares issued and outstanding (pre-transaction)

81.6 mn shares

No. of new Navistar common shares issued in capital increase

16.2 mn shares

Subscription price

$ 15.76

Implied premium to prevailing market price

12%

Cash proceeds for Navistar

$ 256 mn

No. of Navistar common shares issued and outstanding post capital

increase

97.9 mn shares

Volkswagen Truck & Bus equity stake in Navistar (post dilution)

16.6%

Expected to close following receipt of certain regulatory approvals, the finalization of the agreements governing the procurement joint venture and the first contract under the technology and supply framework agreement and other customary closing conditions

Estimated Volkswagen Truck & Bus and Navistar market presence (by region)

Planned technology and supply cooperation and procurement joint venture expected to take advantage of combined scale to deliver high-quality products and significant potential synergies.

Figure 1+2: Figures for FY 2015.
Figure 1: Volkswagen Truck & Bus commercial vehicles figure (sum of Scania and MAN CV )
Figure 3: Total volume calculation just for visualization of synergy potential; both companies will remain independent